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6.1.1 Budget dynamics - results
Ukraine is currently only able to cover 62% of the state budget, Ukraine Business News reported on June 28.
This was stated by the Minister of Finance, Serhiy Marchenko, who claims that Ukraine’s economy has suffered much more than Russia’s, even amidst the prodigious sanctions against Moscow.
“We cover only about 62% of the state budget, and this is without taking into account military expenditures. Inflation reached 18% in May. The total loss is about $103.9bn,” Marchenko said. “The demolition of residential buildings alone caused $39bn in losses.”
The minister also believes that financial aid from the West is insufficient and doesn't cover all of Ukraine’s costs, which amount to $5bn a month. Moreover, he expects Ukraine’s GDP will drop due to the destruction of infrastructure and lost business revenues.
Speaking about the sanctions against Russia, Marchenko claims they are not very effective and calls for additional sanctions against more Russian banks and companies. “We need Russia to cease to be a subject of the international economic system,” he said.
Although Ukraine’s GDP declined by 35-40% in May, this is actually an improvement compared to March, when it fell by 44%.
Ukraine’s inflation problem is highest in South Ukraine as Russian troops are partly occupying the regions. However, Western regions are not so severely affected and are even close to the level of inflation of neighbouring countries with businesses returning to West and Central Ukraine.
30 UKRAINE Country Report XXXX 2018 www.intellinews.com