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2015 budget: an “empty” version

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On December 29, 2014, the Verkhovna Rada of Ukraine adopted the Law On State Budget 2015. The bill introduced to the parliament several days before the voting offered a too ambitious income plan (with an anticipated growth of over 30%), included a very wide fiscal gap (8.8% of GDP, including 3.7% GDP of the central budget deficit), and was too reliant on the money issue by the National Bank (the budget required to issue about UAH 200 billion).
The government stated that the budget was realistic, and implementation only requires change to 49 legislative instruments offered by the “budget package”. The budget offered by the government faced a furious reaction by the members of parliament due to its poor conformity with the Ukrainian economic reality and clearly jeopardized the negotiations with the IMF (the Fund insisted on a fiscal deficit not exceeding 5.8% of the GDP).
Nevertheless, the Government aggressively insisted on passing the bill without significant change and necessarily (!) before the end of 2014. The voting took place in the night from 28th to 29th of December and only after the Prime Minister promised to revise the budget by February 15, 2015, according to the IMF mission recommendations. Considering the fact that the IMF will certainly oppose such an optimistic budget, it can be safely said that the adopted budget is in fact “empty” and most likely will have entirely different content in just a few weeks.
However, despite the anticipated large revisions to the national budget, we analyzed the “empty” version of the 2015 budget for the understanding of the direction in which the Ukrainian budget policy is going.
Read the report “2015 Budget: an “Empty” Version” in full.

January 9, 2015