Monthly Publication: Budget and Banking Systems of Ukraine

The General Fund received Hr 48.7bn or 26.5% of the annual plan, compared to Hr 51.5bn year-on-year, which amounted to 27.7% of the approved annual target. The State budget Special Fund revenues were recorded at Hr 13.3bn in January-April 2009 (without own revenues of budgetary institutions), which amounts to 34.1% of the annual plan. In April 2009, Hr 14.3bn were mobilized for the General Fund of the State budget (including VAT compensation) or 105.7% of the monthly apportionment of the General Fund revenues of the State budget. The Special Fund intake of the State budget totaled Hr 3.9bn in April 2009 (without own revenues of budgetary institutions) or 133.7% of the monthly apportionment of the Special Fund of the State budget. Some non-typical revenues have contributed to execution of the State budget revenue plan, including Hr 3.4bn in April 2009 from the National Bank of Ukraine and Hr 1.8bn in value-added tax on imported natural gas remitted by the NAK Naftohaz Ukrayiny company. The State Treasury reimbursed Hr 9.9bn in value-added tax from the budget in January-April 2009 or 100.0% of the plan for January-April, including Hr 2.8bn paid up in April or 102.2% of that month's target. In general, the State budget revenues decreased by Hr 186.6mn in absolute terms in January-April 2009 or by 0.3%. Payments on State's debt obligations for the General Fund of the State budget were effected in a timely manner in January-April 2009, according to the State Treasury data. The expenditures for servicing the State debt totaled Hr 1.5bn or 9.7% of the annual amount, including Hr 0.7bn or 7.1% for internal debts, and Hr 0.8bn or 15.0% for external debts. The expenditures for repayment of the State debt totaled Hr 2.4bn or 8.6% of the annual amount in January-April 2009, including Hr 1.4bn or 9.3% for internal State debt and Hr 1.0bn or 7.7% for external State debt. The State borrowing was incurred at Hr 6.6bn or 7.4% of the planned annual amount. A complicated macroeconomic situation was observed in January-April 2009 as the result of negative processes in the world economy, which unfolded in the second half of 2008. The industrial output decline amounted to 31.9% in January-April 2009 year-on year, which, to a certain degree, was caused by a slower growth in personal income and declining demand for Ukrainian exports on foreign markets. The World Bank has downgraded its GDP decline forecast for Ukraine to 9% for 2009 (the previous forecast predicted a GDP decline of 4%). GDP is predicted to grow by 1% in 2010, with gradual increase to 4-5% annual. The main contributing factors for the predicted GDP decline in Ukraine, as perceived by EBRD, include a drop in prices of steel, which is the core of Ukrainian exports. This will result in a declining volume of export, increase in price of Ukraine’s energy imports, and Ukrainian companies’ facing limited opportunities for external borrowing. Inflation reached 2.9% in January 2009. However, a gradual shrinking of the aggregate demand has led to easing of inflationary pressures in February and March. The consumer price index amounted to 105.9% in Q1 vs. 109.7% in Q1 2008. Inflation amounted to 106.9% in January-April 2009 against 113.1% year-on-year. Export of Ukrainian goods dropped by 41.4% in January-April 2009 year-on-year, and amounted to $11.4bn. Import of goods in Ukraine totaled $13.3bn in the period under review, which is 50.1% below the respective last year’s figure. A negative balance of foreign trade in goods totaled $1.9bn (a negative balance of $7.4bn was also recorded in the respective period of 2008). The ratio of import coverage by export amounted to 0.86 (against 0.72 in January-April 2008).