Page 34 - UKRRptSept18

Ukrainian Treasury's balance estimated at $74.2mn as of August 1 – the lowest level since January 2014 -- down 80% from the figure posted in early July 2018, the government reported on August 1. The last time the balance got this low four years ago it dropped to UAH1.739bn ($64.7mn). Ukraine budget receipts are almost $430mn below target since year-start, the government reported earlier. The current balance is 80% down from the figure posted in early July 2018 and 66.7% lower than at the beginning of the year, according to the website of Ukraine's State Treasury Service, UNIAN reports .
6.1.1 Budget dynamics - specific issues...
Financing of the security and defence sector of Ukraine will amount to about UAH200bn ($7.2bn), or at least 5% of GDP in 2019 , according to Secretary of the National Security and Defence Council (NSDC) Oleksandr Turchynov. Last year, Ukrainian President Petro Poroshenko enacted a decision of the NSDC to increase security and defence spending in 2018 to UAH165bn. According to Ukraine's state budget, security and defence spending in 2017 should be financed at the level of UAH143.6bn. According to Turchynov, Ukraine's defence budget revenues should be formed "solely from real substantiated incomes". The priority areas of financing for the next year include the development and procurement of modern high-precision missile weapons (missile systems and complexes, in particular cruise missiles), artillery armaments, armoured vehicles, precision munitions, ammunition and special chemistry, strengthening of the state's air defence system and capabilities of the Air Force, according to Interfax. Implementation of state policy in the cyber security sphere, implementation of measures for the development and modernisation of special communication and information security; modern equipment for proving grounds for testing rockets, ammunition, etc. are also planned.
The Ukrainian Armed Forces need funding at the level of at least UAH112bn in 2019 , Chief of the General Staff and Commander-In-Chief of the Ukrainian Armed Forces Viktor Muzhenko has said. "We calculated that this should be the amount of about UAH112bn. This is the minimum need for the army. Now we are given just UAH82bn, which is clearly not enough to keep the Ukrainian Armed Forces in a combat-ready state. I'm not talking about capacity building," he said in an interview with BBC Ukrainian.
The government is running low on cash to meet its budgetary obligations
and it has few sources of financing to produce the cash in the short-term.
The Finance Ministry’s account for paying pensions and public-sector salaries has plunged to its lowest in more than four years as budget revenue fails to meet the plan.
Deficit goals remain intact says MinFin and financing will arrive from Eurobond sales and foreign aid, but the latter is caught up in a row with the IMF and may not appear this year.
Central bank Deputy Governor Dmytro Sologub admits that there is a liquidity shortage. “The deficit may not exceed the target, but there’ll be a shortfall and the government will need money to cover it. The problem is that there are very few sources of financing available.”
The IMF has de facto suspended Ukraine’s $17.5bn stand by programme and
34 UKRAINE Country Report September 2018 www.intellinews.com