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6.0 Public Sector 6.1 Budget
6.1.1 Budget dynamics - results
Ukraine's state budget revenue rose 29.6% y/y to UAH66.1bn in January, outperforming the plan by 6.7%, the State Treasury provisionally reported on February 1. Net tax revenue surged 48.8% y/y to UAH33.3bn (11.4% above plan) amid 14.7% y/y growth in gross tax revenue and a 21.8% y/y fall in VAT reimbursement. Customs revenue jumped 21.9% y/y to UAH22.1bn (0.4% above plan).
Local budgets' fiscal revenue improved 2.4% y/y to UAH22.0bn in January, which is 12.4% below the plan. Social payments (pension and other social fund contributions paid by employers) advanced 5.0% y/y to UAH23.1bn.
6.1.3 Budget dynamics - funding
Ukraine is planning to issue $2.4bn Eurobonds in 2021, NBU head says. Ukrainian government is expecting to receive about $2.2bn from the IMF (in three tranches), and is planning to issue Eurobonds for $2.4bn in 2021, National Bank governor Kyrylo Shevchenko told Reuters, as published on February 2. He also revealed his expectations that foreign investors would purchase local government bonds for about $1bn this year. Recall, Ukraine’s state budget for 2021 assumes Ukraine will borrow net UAH128bn ($4.4bn) on the domestic market and net UAH106bn ($3.6bn) abroad.
The EIB has agreed to repurpose €50 million from an existing facility to finance buying corona vaccines for Ukraine. In January, the Cabinet of Ministers approved taking a €270mn loan for Boryspil International Airport. The money is to go to replacing the 40-year-old main runway, and adding new lights, de-icing facilities and an emergency rescue station. The EIB also is discussing with the government a major loan to improve rural drinking water across the country, reported the government portal.
The European Investment Bank increased its new investments in Ukraine last year by 50% y/y, to more than €1bn, bringing total EIB investment in Ukraine to €7.5bn, Jean-Erik de Zagon, the bank’s resident representative for Ukraine, told reporters yesterday. Bank Vice-President Teresa Czerwin´ska said Ukraine now receives 60% of EIB money destined for the Eastern Neighborhood, a group of 16 countries to the east and the south of the EU. She said: “We delivered record investment of over €1 billion in Ukraine in 2020, focusing our operations on support for conflict-affected regions of eastern Ukraine, sustainable and green infrastructure, digitalization, innovation and business recovery after COVID-19.”
IMF mission restarted its review of Ukraine in February, but analysts are not expecting the next tranche until the second quarter of this year, or possibly in the second half of the year. However, with $11bn of debt to redeem in the third quarter a deal is very likely before that debt becomes due. The IMF
43 UKRAINE Country Report February 2021 www.intellinews.com
