Ukraine's government endorses 2021 budget agreed with IMF: Key indicators

Ukraine's government has endorsed the draft national budget for 2021, which was agreed with the country's key lender, the International Monetary Fund (IMF).

The draft budget, which is to be tabled in parliament for voting in the second reading, provides for a deficit of 5.5% of GDP, according to Prime Minister Denys Shmyhal.

"We've found out an opportunity to reduce the budget deficit to GDP from 6%, as proposed at the first reading, to 5.5%," he said at a government meeting on November 26.

Read alsoUkraine successfully finalizes discussions with IMF on draft 2021 budget

According to the prime minister, next year's revenue is expected at UAH 1.092 trillion (US$38 billion) and spending at UAH 1.328 billion (US$46.7 billion).

"We had a lot of joint work and consultations with lawmakers, experts; took into account most of the proposals, based on the priority of expenditures, the existing possibilities of budget resources and the condition of the national economy. The key aspect is that the budget remains balanced and realistic for implementation," he said.

Finance Minister Serhiy Marchenko, in turn, said that 2,451 proposals had come from lawmakers during the finalization of the document and most of which had been taken into account, proceeding from the priority of expenses.

"In the process of finalization, we consulted with an International Monetary Fund mission to form a common stand on key budget indicators under a cooperation program between Ukraine and the IMF, a framework for revenue, expenses and deficits. In general, the benchmarks of the 2021 budget coincide with the estimates of the Fund's experts, which was important for further successful cooperation between Ukraine and the IMF," he said.

According to Marchenko, the government managed to reduce the deficit of the budget from 6% to 5.47% of GDP.

"Budget revenue reflects what revenue the economy can actually provide next year without raising taxes. State budget receipts increased by UAH 21 billion (US$738 million), expenditures are foreseen in the amount of UAH 1.328 billion (US$46.7 million). A reduction in the general expenditure fund is estimated at UAH 12.8 billion (US$450 million). This made it possible to reduce the budget deficit by UAH 24 billion (US$844 million)," he said.

Next year's budget: Details

• On September 14, the Cabinet of Ministers approved the draft state budget for next year, which provides for a deficit of 6% of GDP. Budget revenue for 2021 is set at UAH 1.071 trillion (US$37.6 billion), while spending is fixed at UAH 1.350 trillion (US$47.4 billion). The deficit of the budget is capped at UAH 270 billion (US$9.47 billion).
• The draft budget also allocates UAH 104 billion (US$3.65 billion) for the payment of social benefits, welfare and subsidies, and social spending in total will amount to UAH 323 billion (US$11.33 billion).
• Deputy Chairman of the Holos (Voice) parliamentary faction Yaroslav Zheleznyak said that lawmakers had submitted over 2,400 amendments to the draft law on the national budget of Ukraine for 2021.
• On November 5, a bill on the draft budget passed its first reading. While presenting the document in parliament, Finance Minister Marchenko said his ministry had increased the amount of spending in the bill by over UAH 20 billion (US$703 million).