Page 40 - UKRRptDec20

6.0​ Public Sector 6.1​ Budget
Ukraine’s Cabinet of Ministers lowered the deficit of the 2021 state budget to 5.47% of GDP from 6.0% of GDP on November 26, Interfax-Ukraine newswire reported the same day citing Prime Minister Denys Shmyhal. The budget deficit in the draft law proposed for the second reading in the Verkhovna Rada is slashed by UAH24bn to UAH246bn.
The updated draft law assumes budget revenue of UAH1,092bn (UAH21bn more compared to the first draft) and budget expenditures of UAH1,328bn (UAH3bn less).
This document is the result of MinFin's recent effort aimed to amend the draft budget for the second reading in order to ñomply with the IMF's vision of a “realistic” financial plan for the country, which ​urgently needs the financial support​ of international financial institutions.
Analysts expect the adjusted draft law will successfully pass the second reading in Rada next week. This will somewhat alleviate the talks with the IMF, and MinFin might use this as a point while trying to access the international debt market with a new placement of Eurobonds, which is necessary for budget gap financing amid the low capacity of the domestic debt market.
On November 5, Ukraine's parliament, the Verkhovna Rada, supported the draft state budget for 2021 adopting in the first reading a document that stipulates an increase in revenues by UAH20.2bn ($702mn​), Interfax-Ukraine reported.
According to the draft document, UAH12bn of this amount is an increase in receipts from the National Bank by UAH12bn (although the NBU considered the initial plan to be overstated by UAH10.4bn), and another UAH4.24bn from an increase in the minimum dividend rate and the share of the allocated to the state budget of the net profit of state-owned companies and companies with state shares from 30% to 90%.
As for the costs, it is proposed to increase them for individual programs and measures in the field of health care system, education, social protection, culture, sports; ensuring the functioning of diplomatic institutions [for UAH943mn]; utilization of solid rocket fuel [for UAH520mn]; provision of state support to agricultural producers [for UAH500mn] and the implementation of state investment and infrastructure projects [from UAH1.13bn to UAH4bn].
The draft Budget Conclusions also indicated a proposal to increase spending on the Verkhovna Rada by UAH247mn, to provide the Ministry of Economy with UAH110.17mn for the creation of centers of the creative economy.
The Rada also recommended that the government return to the text of the state budget the limit amount of state guarantees next year and the guaranteed state debt at the end of the next year.
40​ UKRAINE Country Report​ December 2020 ​ ​www.intellinews.com