Page 36 - UKRRptDec22

6.0 Public Sector 6.1 Budget
Ukrainian taxpayers have exceeded the budget revenue plan by more than 13%. From the beginning of 2022, the budget has received UAH 73.8B more in taxes and fees than last year, said Danylo Hetmantsev, head of the Committee of Finance. However, Hetmantsev noted that in November, for the first time since the beginning of the year, the income plan was not met, falling short by 1.7%. The shortfall was caused by deficiencies in income tax, UAH 42B, and personal income tax, UAH 2.7B. According to Hetmantsev, tax revenues will continue to deteriorate. The largest amount of reimbursed VAT since the beginning of the war, UAH 13.6B, also had an impact on the November figures.
President Zelenskyy signs Ukraine’s State Budget for 2023 into law on November 23. In the new budget, the real 2023 GDP growth forecast was adjusted to a more conservative 3.2% instead of the previous forecast of 4.6%, and the inflation forecast for 2023 has been reduced from 30% to 28%. More optimistic expectations for financial support from international partners have made it possible to adjust the hryvnia’s exchange rate to the dollar. By the end of the year, it will be UAH 45.8 per dollar instead of the UAH 50 per dollar in the previous forecast. The state budget’s revenues for 2023 are foreseen as UAH 1.330T, including general fund revenues of UAH 1.173T and special fund revenues of UAH 156B. The state budget deficit was also increased by UAH 17B, up to 20.6% of the GDP. Resources for national security and defense make up about 50% of the total budget. This is UAH 1.141T, or 18.2% of GDP.
The Ministry of Finance of Ukraine expects about $4.8bn in external financing in November and about $3bn in December, Finance Minister Serhiy Marchenko said at a briefing in Kyiv on November 14.
"If it were, let's say, September or October, I would say that the situation we have is quite positive and optimistic. But since December is the last month of the year and, as a rule, December expenses are the highest and above average monthly, therefore, of course now we are looking for every opportunity to get through November and December painlessly, to provide all the necessary expenses and funding for the deficit," he said.
Speaking about the financing of January-March 2023, Marchenko said that the situation is complicated by the fact that at the beginning of the year tax revenues are less, while there are questions about the predictability of foreign assistance.
"But we are working on it, and EUR18bn (from the EU) has already been announced. Part of it will be used in the first quarter to finance the budget deficit ... There are many issues related to war difficulties. We are solving them. We hope that we will get positive results," the minister said.
Ukraine needs about $5bn to fund the budget this year. Next year, the government plans to reduce the state budget deficit to $3-4bn per month (total $38bn for the year), relying on US, IMF and EU funding, as well as raising $17bn for emergency recovery.
36 UKRAINE Country Report December 2022 www.intellinews.com