Budget Chronicles: ІІІd quarter 2015

In third quarter 2015 general budget revenues increased 55.4% y/y up, general budget spending increased 23.4% y/y.Total amount of budget surplus for the period of 9 months amounted to UAH 32.5 billion

In the third quarter of 2015 the growth rate of consolidated budget revenues increased to 55.4%. Consolidated budget revenues for the period of July-September, 2015 amounted to UAH 169.2 billion. More than a half of revenue growth had been achieved due to the influence of temporary factors, such as transfers from the National Bank, an additional import duty, low comparison base (precisely at the same time last year the conflict unfolded in the East) and the technical effect of introducing an electronic system of VAT administration.

In the third quarter of 2015 consolidated budget expenditures amounted to UAH 147.9 billion and were by 23.4% higher than in the third quarter of 2014.During the third quarter, defense spending and debt service still made up significant shares in the expenditure structure – 8.3% and 12.9% respectively, with the highest annual growth rate peaked at 81.8% for the defense spending and at 73.1% for the debt service. Furthermore, due to the enhancement of social standards in September coupled with the increase in tariffs in the second quarter of 2015, the growth of spending on public sector wages (education, medicine, culture) and social security had been accelerated.

In the third quarter of 2015 consolidated budget revenues outpaced expenditures, which created an opportunity to accumulate UAH 20.2 billion of budget surplus. Total amount of budget surplus for the period of 9 months amounted to UAH 32.5 billion, of which UAH 23.7 billion were accumulated by local budgets. Noteworthy, on the consolidated budget a deficit of UAH 73.1 billion is envisaged in 2015, equal to 4.2% of officially forecast GDP.

More details on the implementation of the consolidated budget of Ukraine in the third quater of 2015 are included in our traditional report “Budget Chronicle: Q3 2015”.