Ukraine budget deficit swells to UAH 18.5 bln in May

Макроэкономика 01.07.2013 Ukraine’s state budget deficit broke another record in May in reaching UAH 18.5 bln in 5M13 vs. a UAH 2.2 bln deficit a year ago, according to MinFin data released on June 27. Alexander Paraschiy: The situation with state finances is clearly worsening. A UAH 18.5 bln deficit is not critical but the bad news is that fiscal gap expansion traditionally accelerates in the second half. To make matters worse, the NBU’s traditional support of the budget will become quite risky given the potential revival of devaluation sentiments on the market this fall amidst QE3 tapering concerns. In this respect, we are keeping our budget deficit estimate at 3.5% of GDP in 2013 while recognizing that the fiscal gap might get much wider.