Ukraine central budget revenue falls 12% in January

Ukraine central budget revenue falls 12% in January



2 березня 2015 года
Конкорд Капитал

Ukraine’s central budget revenue fell 11.7% yoy in January to UAH 22.4 bln compared to UAH 25.3 bln a year ago. The main reason for the slump was no direct wires from the central bank compared to UAH 4 bln in support a year ago. State revenue rose 5.1% net of the NBU contribution. The budget deficit for January reached UAH 9.2 bln compared to UAH 1.6 bln a year ago.



Authorities have targeted a 37% increase in state revenue in 2015, according to the new draft of the spending plan, to be voted today. They outlined the central budget deficit at UAH 76.3 bln, or 4.1% of GDP.



Alexander Paraschiy: The Cabinet anticipates extraordinary state revenue growth (+37% yoy) in 2015 on the back of hiked taxes and accelerated inflation (the official CPI target is 26%). Against the backdrop of January’s results (even net of the NBU effect), such a target looks overly optimistic.



Consumer price growth already reached 28.5% yoy in January. However, a subsequent sharp fall in consumption (organized retail plunged 23.6% yoy in January) on the back of hryvnia devaluation (nearly 50% yoy to UAH 16/USD in December 2014) undermined hopes to boost state collections. In this context, the new wave of hryvnia devaluation (to nearly UAH 30/USD) does not promise anything good for state revenue, regardless that inflation will be even stronger.



Against this backdrop, more hryvnia printing with extra pressure on the exchange rate looks inevitable over the upcoming months. Still, IMF support with extra IFI funding might prevent further hryvnia decline if the funds are large enough and cooperation with IFIs goes smoothly.

Источник: Конкорд Капитал

Аналитик: Александр Паращий
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