Page 31 - UKRRptNov21

Non-tax revenue surged 44% y/y to UAH16.9bn in September (after increasing 20% y/y in August). In particular, the revenue of budget-financed entities increased 48% y/y; administrative payments advanced 40% y/y.
This was a significant drop to a deficit of UAH32bn September from a surplus of UAH53bn in the prior month. It is likely that the government significantly increased its expenditures for construction and infrastructure programs. We expect to see a significant increase of budget expenditures and deficit in 4Q21.
In January-September, the State Tax Service transferred UAH449.6bn to the budget, which is UAH62.3bn more than in the same period last year. Thus, for 9 months of 2021, the State Tax Service accumulated UAH449.6bn, which is UAH62.3bn more than in the same period last year. Indicative indicators for this period are exceeded by UAH21.9bn. In particular, in September, the State Tax Service provided revenues to the budget in the amount of UAH39.7bn, which is UAH8.1bn more than in September 2020. According to the State Tax Service, UAH93.7bn, or 17.3%, remains to be fulfilled by the annual target of the general fund of the 2021 state budget. Also in January-September 2021, UAH111.0bn of VAT was reimbursed to taxpayers.
6.1.3 Budget dynamics - funding
Ukraine may receive $1.4bn from the IMF in October-December 2021,
predicted JP Morgan. “We believe that the IMF will pay a tranche of $1.4bn in the fourth quarter of 2021 but is considering a possible range of this amount from $1bn to $1.5bn”, JP Morgan said. Analysts also believe that the NBU will continue the trend to increase the refinancing rate and in January-March 2022 it will grow from the current 8.5% per annum to 9%, in the second quarter - up to 9.25%, in the fourth - up to 9.5%.
The EU has provided a total of € 190mn in assistance and a € 1.2bn macro-financial assistance program to Ukraine to combat the COVID-19 pandemic. The joint statement following the 23rd Ukraine-EU summit (Ukrinform).
The European Commission disbursed a €600mn loan tranche to Ukraine on October 25, it reported the same day. This was the second tranche under the macro-financial assistance (MFA) for €1.2bn related to alleviating the economic consequences of the COVID-19 pandemic. Ukraine received the initial tranche of the same size in December. In mid-September, the European Commission reported that the decision to disburse the second tranche had been made, with money to come in October. Recall, Ukraine has been granted the largest amount (of ten countries) of the EU’s COVID-related MFA program, with a total amount of €3bn. With this tranche, total loans to Ukraine under EU’s various MFA programs reached €4.4bn, the Commission reported. The tranche “is a clear sign of EU support for Ukraine's reform agenda,“ Valdis Dombrovskis, European Commissions’ executive vice-president, commented. “Ukraine has implemented all eight policy commitments relating to public finance management, governance and rule of law, improving the business climate, and sectoral reforms and state-owned enterprises,” the Commission’s press-release stated adding that Ukraine also made progress in policies under IMF program, in particular “the major legislative advances in the judicial area.”
31 UKRAINE Country Report November 2021 www.intellinews.com