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goods dropped 12.8% y/y.
Non-tax revenue improved 8.9% y/y, speeding up from 7.3% y/y growth in January. In particular, administrative collections and payments advanced 30.8% y/y, while collections of budget-financed entities increased 22.4% y/y. Meanwhile, income from ownership and entrepreneurship declined 5.6% y/y.
“These February fiscal statistics have largely lost their relevance in light of the inevitable economic consequences of the severe quarantine introduced on March 11 to contain the coronavirus infection,” Evgeniya Akhtyrko. “The lockdown, which has been extended to April 24, will have an enormously negative impact on public finances. Not only will fiscal collections plummet because of frozen business activity, but the government will have to cope with elevated expenditures across various sectors in order to alleviate the quarantine's harsh effects on the economy.”
6.1.3 Budget dynamics - funding
By giving final approval to the ‘anti-Kolomoisky’ bill, the Rada will unlock a first $4bn tranche of IMF money in April, Danylo Hetmantsev, head of the Rada finance committee, tells Radio NV. Hetmantsev predicts final Rada approval by April 10. Linked to the $8 IMF Extended Fund Facility would be $1bn in World Bank Funding, a €500mn tranche from the EU, and bilateral aid from Canada and Japan. Separately, Reuters reports Ukraine is in talks with the World Bank for a $150mn loan for social payments related to the coronavirus curbs.
To ease the social impact of the coronavirus quarantine, the government plans to nearly double its borrowings this year, to $23bn. In a statement to the Rada, the government proposed tripling the budget deficit to $10.6bn and doubling foreign borrowing, to $9.4bn. Budget revenues are forecast to drop by $4bn. The government also radically slashed forecast income from privatization this year, to $18mn, from $220mn.
German Chancellor Angela Merkel and President Zelenskiy have agreed on a €150mn loan from Germany to help Ukraine fight Covid-19. These funds would be in addition to two other new sources of money to fight the epidemic: €40mn from the European Investment Bank, and €80mn from the European Commission.
6.1.4 Budget dynamics - privatization
With foreign markets volatile over the impact of coronavirus curbs, the State Property Fund is suspending privatizations of ‘big’ state companies “until the stabilization of the financial markets,” Dmitry Sennichenko, head of the fund, announces on Facebook. He appeals to Ukrainian investors to look at the Fund’s inventory: “Thousands of small-scale privatization facilities: baths, garages, abandoned houses, non-working facilities, unfinished construction.”
Pushing privatization, the Cabinet of Ministers transferred March 3 435 state-owned companies and properties to the State Property Fund for sale through auction. With this number, “the government has delivered 961 objects in six months, which is 10 times more than 10 years before,” Prime
35 UKRAINE Country Report April 2018 www.intellinews.com
