Page 39 - UKRRptJun19

6.0 Public Sector 6.1 Budget
Budget and debt indicators
State budget revenues, UAH bln
% of GDP
State budget expenditures, UAH bln
% of GDP
State budget balance, UAH bln
% of GDP
Public debt, UAH bln
% GDP
Source: SP Advisors
6.1.1 Budget dynamics - results
2008 2009 2010
231.7 209.7 240.6
2011
314.6
2012
346
2013
339.2
2014
357.1
2015
534.6
2016 2017
616.3 793.4
2018E
2019E
928.1 1053
24.4% 23.0% 22.3% 24.2% 24.6% 23.2% 22.5% 26.9% 25.9% 26.6% 26.1% 26.2%
244.2 245.2 304.9 338.1
399.4 403.9
435.1 579.8
686.4 841.3 987.4 1121
25.8% 26.8% 28.3% 26.0% 28.4% 27.6% 27.4% 29.2% 28.8% 28.2% 27.7% 27.9%
-12.5 -35.5 -64.3 -23.6
-53.4 -64.7
-78 -45.2
-70.1 -47.9 -59.3 -68.4
-1.3% -3.9% -6.0% -1.8% -3.8% -4.4% -4.9% -2.3% -2.9% -1.6% -1.7% -1.7%
189 318 432 473 516 584 1,101 1,572 1,930 2142 2169 2410
20.0% 34.8% 40.1% 36.4% 36.7% 39.9% 69.4% 79.0% 81.0% 71.8% 60.9% 59.9%
Ukraine’s general budget revenue surged 37.0% y/y in April on the back of a UAH47.6bn dividends wire from the National Bank (NBU).
Net of the NBU money, general budget revenues increased only 5.0% y/y. Excise duties (33.1% y/y higher), coupled with personal income tax (+25.5% y/y), were the main source of budget revenues, apart from NBU support. At the same time, VAT revenues dropped 11.5% y/y in April both due to VAT collections decreasing (-4.9% y/y) and stronger VAT reimbursements (+18.9% y/y).
For 4M19, general budget revenues look somewhat better: 18.0% higher y/y with the NBU dividends, and +9.1% y/y net. Apart from the NBU wire, personal income tax (+23.4% y/y) and excise duties (+16.5% y/y) underpinned the tax collections increase. VAT revenues declined 2.7% from the previous year on the back of a 31.2% y/y reimbursement advance.
The one-shot dividend wire improved fiscal balance by the end of April. The general budget was reported at a UAH17.6bn surplus (near 0.5% of GDP) for 4M19. The central budget had a minor deficit (UAH1.7bn), while local budgets traditionally stashed away substantial funds (UAH19.3bn surplus for 4M19).
The budget numbers look disturbing according to Concorde Capital analysts. The NBU has already wired to fiscal coffers major part of NBU dividends envisaged for this year (UAH64.9bn total), meaning that MinFin does not have much reserves. Meanwhile, the core sources of budget revenues are weak. VAT used to be the backbone of general budget collections, but now it’s in the red. The high level of VAT reimbursement can be seen as potential leverage to correct budget collections (as it used to be). However, a return to VAT reimbursement delays will be one more signal that Ukraine’s public finances are in trouble.
39 UKRAINE Country Report June 2019
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