The Monitoring of Main Indicators of Budget and Banking Systems of Ukraine

It contains a brief analysis and selections of graphs and charts illustrating the main changes occurring in the budget and banking systems of Ukraine. The publication is made possible by the generous support of the American people through the United States Agency for International Development (USAID). The Institute for Budgetary and Socio-Economic Research (IBSER) is responsible for the contents of the publication, which do not necessarily reflect the views of USAID or the United States Government. The publication is available at the IBSER office in Kyiv, Ukraine. The contents of the publication include a monitoring of the execution of the consolidated, state, and local budgets in Ukraine. The monitoring covers the period from January to May 2011 and provides an analysis of the main indicators of the budget and banking systems of Ukraine. The execution of the consolidated and state budget revenues in January-May 2011 continued the trend prevalent since the outset of the year, with revenue intake generally higher than planned in the annual budget. The state budget received Hr 118.0bn, which is nearly 30% more than the 2010 figure. This was 42.3% of the planned annual revenue intake. The state budget revenue grew at a faster pace in May than in Mays of previous years, mainly due to the collection of Hr 10.3bn in enterprise profit tax, which is nearly triple the revenue in May 2010. The receipts from royalties, which nearly doubled in January-May 2011 year-on-year, present another tax revenue growth source. In particular, an increase was noted in the receipts from royalties for oil extraction (by Hr 2.5bn or more than 3 times), gas condensate (by Hr 0.7bn or more than 2.5 times), and for the transit of natural gas (by Hr 0.5bn or more than 1.5 times). The overall improvement of Ukraine's economic situation ensured growth in other tax revenues, including VAT (+130.5%), excise tax (+112.1%), and taxes on foreign trade and external transactions (+134.3%). The state budget deficit was funded at 4.1% of the planned annual amount, which is 22.3ppt less than last year. At the same time, 43.4% of the planned borrowing amount was incurred and was mostly preserved as part of the balance of funds, or 16.5ppt more year-on-year. The positive trend of reducing the state budget deficit year-on-year continues, with the deficit amounting to Hr 2.4bn in May, which is 21.0% less than last year. Local budget revenue during the first five months of 2011 amounted to 38.8% of the annual plan, which is the highest figure in recent years. The key distinction of revenue intake in May was an increase in revenues against April, which is unusual in recent years. One of the main factors behind such changes involved a 1.5 times growth in revenues from the fees for special use of natural resources. Similarly to previous years, an increase in revenues from the payment for land in the structure of these fees was noted in May (by 15.1% against May 2010). The expenditures of local budgets increased by 27.6% in May. As usual, the majority of local budget expenditures were used for society and culture. However, expenditures for economic activity, housing and communal services, and environmental protection increased by nearly 2.3 times in the reporting period. The key items showing growth since the beginning of the year included construction (8.1 times more), agriculture (4.9 times), environmental protection (5.4 times), and housing and communal services (1.7 times).