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To achieve the target deficit, it is necessary to strictly control expenses, the central bank said.
The National Bank of Ukraine (NBU) notes significant risks of the state budget deficit in 2018 exceeding the target level of 2.5% of GDP meeting the requirements of the program with the International Monetary Fund.
In order to achieve the target deficit, it is necessary to strictly control expenses, and it may also be necessary to adjust indicators of revenues and expenditures of the state budget that are too optimistic, according to a financial stability report by the National Bank of Ukraine.
The report notes that the revenue side of the budget is growing slower than planned due to inadequate taxes on imported goods and services, excises from goods produced in Ukraine, rental payments and profits of the NBU, while expenditures may grow at a faster pace.
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"In order to meet the budget figures, the government is likely to resort to savings on capital expenditures and strict control over transfers. First steps have already been taken in this direction: since May 1, the rules for the registration of housing subsidies have been changed in order to reduce the number of abuses with obtaining state aid and enhance their addressability," the NBU believes.
At the same time, the regulator notes that after the price of gas for household consumers is increased, on which the provision of the next tranche of the IMF loan and the financial sustainability of Naftogaz depend, the number of recipients of social assistance may grow again.
UNIAN memo. The national budget of Ukraine for 2018 sets a goal of UAH 917.9 billion ($35.1 billion) in revenue and UAH 991.7 billion ($37.9 billion) in expenditures. The budget deficit is capped at UAH 80.6 billion ($3 billion), or 2.4% of GDP.