Page 43 - UKRRptSept19

6.1.2 Budget dynamics - specific issues...
Ukrainian state-owned gas companies Naftogaz group paid nearly UAH70.6bn ($2.8bn) in taxes and duties to the state budget in January-July 2019. Naftogaz group’s contribution accounted for 16.3% of the state budget revenue in the first seven months of 2019. Naftogaz group remains Ukraine’s biggest taxpayer. In 2018, the group paid UAH137.8bn in taxes and dividends to the state and local budgets.
Cabinet decides to release regional funding, ignoring president’s request. The Cabinet of Ministers decided on August 14 to release financing for regional programs and projects, ignoring the request by the President’s Office to hold back such funding. The resolution orders the Finance Ministry and Regional Development Ministry to provide funds since August 1 for regional programs, particularly in small towns and communities, from the State Regional Development Fund. “The financing schedule is supposed to ensure the ability to timely conduct tenders and conclude projects that were begun,” said a Cabinet statement. The President’s Office sent a letter dated July 23 requesting that Prime Minister Volodymyr Groysman hold back the distribution of regional funding, the pravda.com.ua news site reported on August 16. The same day, the President’s Office released a statement to the news site explaining why it made the request. “The representatives of the old government – concluding their tenure and understanding that they can’t reach agreements on corrupt schemes with the new government – are trying to create all the conditions for claiming budget financing,” the statement said. “The goal of the president, as the guarantor of the constitutional rights of citizens, is to prevent the fulfillment of this negative scenario.” Ukraine’s new convocation of parliament should need only two days to elect the new Cabinet, Andriy Gerus, the president’s representative to the Cabinet, said in an interview with the glavcom.ua news site published on August 16. That implies the first meeting of the new Cabinet could occur on Wednesday, September 4. The ninth convocation of parliament will hold its first session on Thursday, August 29, as decided by a meeting of a parliamentary group in early August.
6.1.3 Budget dynamics - funding
Ukraine is ready for peak repayments on debts in September 2019, Finance Minister Oksana Markarova has said. "In short: everything is under control, [we're] ready by September," she wrote on Facebook on Monday, commenting on the budget for seven months. According to the National Bank of Ukraine, Ukraine will have to repay the following sums on its foreign debt: $4.171bn in the third quarter of 2019 and $3.194bn in the fourth quarter.
Ukraine repays first Eurobond issued as part of 2015 restructuring deal
Ukraine’s Finance Ministry redeemed on Sept. 3 its USD 661 mln Eurobond issued in 2015, the ministry reported the same day. This was the earliest of the bonds issued in 2015 as a part of debt restructuring deal for USD 15 bln. MinFin also paid the last coupon on this bond (USD 25 mln) along with coupons on other bonds restructured in 2015 and maturing in 2020-2027 (USD 420 mln).
If Ukraine’s economy does grow by 40% over the next five years, the nation will have to face paying about $9bn on the GDP warrants issued under the 2015 restructuring deal, calculates Concorde Capital. The warrants currently trade at 92% par. Analyst Alexander Paraschiy writes the new
43 UKRAINE Country Report September 2019 www.intellinews.com