Ukraine April general budget collections surge 46% on NBU support

Ukraine’s general budget revenue continued booming in April as the surplus for the first four months of 2015 reached UAH 18.5 bln (UAH 5.6 bln in April alone).

Budget revenue in 4M15 jumped 30.5% (45.9% in April). The biggest contributors were collections from VAT (+39.8% for 4M15), import duties (+177.9%) and excise tax (54.8%). A 3G license sale brought to the coffers UAH 8.9 bln, or 4.5% of 4M15 collections. Central bank support during 4M15 was UAH 15.2 bln, compared to UAH 19.8 bln in 2014. However in April, a central bank wire sped up collections to 9.7 bln, compared to UAH 4.0 bln in the same year-ago month.

At the same time, spending is lagging behind. For 4M15, general budget outlays increased only 15.5% (22.4% in April), owing to delayed payments from local budgets.

Alexander Paraschiy: It’s encouraging that government revenue is so healthy. To a large extent, the April result was due to central bank support of UAH 9.7 bln and a payment from the 3G license sale of UAH 2.7 bln. Even net of those payments however, state collections jumped, 24.9% which is still impressive. At the same time, as predicted, the devaluation effect on state revenue is indeed fading away. In particular, VAT revenue slowed to 17.3% growth in April, compared to 73.7% in the prior month; and excise tax revenue slowed to 46.7% growth, compared to 102.0% in March. Since the hryvnia was relatively stable in May, we will see a continued slowing tendency and we project state revenue growing in the range of 15% to 20% per month in 2H15

Also in the upcoming months, we anticipate more local budget spending. Recall that in 2015, the authorities started a decentralization process that shifted some spending and taxation functions to local governments. As a result, local authorities received more funds without having sorted out spending procedures. As a consequence, local budget spending lagged. However, local authorities should be compensating for that in the remainder of the year, which should produce a general fiscal deficit at 4.1% of GDP.

Источник: Конкорд Капитал