News
25.08.2010
2010 budget deficit may reach 6% of GDP - analyst
The state budget deficit in 2010 may reach 6% of GDP - about 67 billion UAH (1 USD - 7.9 UAH). This forecast was voiced by the director of the research department with investment company Astrum Investment Management, Oleksiy Blinov.
He added that, despite the fact that this deficit figure is quite high, the government's ability to ensure its funding is no problem, because now there is a considerable demand for Ukrainian debt securities.
"Following the decision by the International Monetary Fund to allocate a loan to Ukraine, the opportunity appeared to issue eurobonds with a return of 7%. The Government Bonds market situation is also good for the Cabinet: the yields on short-term Government Bonds are falling, and the demand for them is rising. Therefore, we believe that by the end of this year, the Government will not suffer problems with financing the budget deficit," the expert said.
Blinov also added that the opportunities to attract debts enable the Government not to consider privatization to be of key importance this year, and admitted that the 2010 state budget revenues from privatization will be replaced with debt financing.
On July 28, the IMF approved the release of a loan to Ukraine in the amount of 15.15 billion dollars under the new cooperation program designed for 2.5 years.
According to Prime Minister Mykola Azarov, 80% of this amount will be credited to the international reserves of the National Bank, while 20% will go to cover the budget deficit.
According to the Memorandum signed by the Ukrainian government with the International Monetary Fund, the deficit of state finances in 2010 should not exceed 5.5% of GDP.
ukrinform
