State Budget Deficit
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MMMooonnnttthhhlllyyy MMMooonnniiitttooorrriiinnnggg ooofff MMMaaaiiinnn IIInnndddiiicccaaatttooorrrsss ooofff ttthhheee BBBuuudddgggeeettt SSSyyysssttteeemmm ooofff UUUkkkrrraaaiiinnneee aaasss ooofff MMMaaayyy 111,,, 222000111555 The Monitoring of Main Indicators of Budget System of Ukraine is a monthly publication prepared based on the data of official statistics. It contains a brief analysis and selections of graphs and charts illustrating the main changes occurring in the budget system of Ukraine. This product is made possible by the generous support of the American people through the United States Agency for International Development (USAID). The contents are the responsibility of the Institute for Budgetary and Socio-Economic Research (IBSER) and do not necessarily reflect the views of USAID or the United States Government. 15-V, Borysoglibs’ka Str., 2nd floor, Kyiv, 04070, Ukraine Phone: (38 044) 353-58-68, 492-97-80/81 Fax: (38 044) 492-97-83 Contents Monitoring of the Execution of the Consolidated, State and Local Budgets in Ukraine.................................................................................................................. 4 State Budget Revenues ............................................................................................. 6 Local Budget Revenues ........................................................................................... 10 State Budget Deficit ................................................................................................. 14 Consolidated Budget Expenditures .......................................................................... 17 State Budget Expenditures ...................................................................................... 19 Local Budget Expenditures ...................................................................................... 29 3 Monitoring of the Execution of the Consolidated, State and Local Budgets in Ukraine • The actual intake of revenues of the consolidated budget of Ukraine totaled UAH 198.4bn in January-April 2015, which is UAH 46.4bn or 30.5% more year-on-year. • The State budget received UAH 162.6bn in the stated period, which is UAH 42.8bn or 35.7% more year-on-year. This amount equals 34.2% of the annual plan. In the last ten years, the share of 4M revenues equaled 28.9% of the total annual intake. This points to positive trends in budget execution, which gives ground to increase the annual plan based on the results of January-April 2015. An increase in tax revenues (+44.5%) was the key contributor to the overall increase in budget revenues. In particular, value-added tax intake rose 44.4% year-on-year to UAH 18.1bn. Also, the amount of tax refunds from the budget increased by 25.4% to UAH 16.5bn in the given period. It should be noted, however, that unlike the preceding three months, the increase in the amount of revenues came not only from increased volumes of taxed import transactions. For instance: VAT grew both in terms of the tax on goods imported into Ukraine (+UAH 14.5bn or +54.2%), and the tax on internal transactions (+UAH 7.1bn or +26.5%). The excise tax on imported goods increased by UAH 3.0bn or 79.8%, while the "domestic" excise tax increased by UAH 3.4bn or 45.3% etc. Still, the devaluation of the hryvnya continues, "helping" to replenish the budget: the import duty amount nearly tripled compared to last year. Another notable feature of budget execution in April 2015 is the transfer of nearly UAH 10bn by the National Bank of Ukraine according to the Law of Ukraine "On the National Bank of Ukraine." • Consolidated budget expenditures totaled UAH 178.8bn in January-April 2015, which is 15.5% or UAH 20.0bn more year-on-year. Expenditures totaled UAH 52.7bn in April 2015, which is 22.5% or UAH 9.7bn more year-on-year. The amount of consolidated budget expenditures increased for nearly all items by functional classification of expenditures compared to the respective 2014 figures. The highest growth (2.9 times vs. April 2014) was in defense spending, which reached UAH 3.9bn. Environmental protection expenditures rose 1.9 times. Expenditures also increased for spiritual and physical development (25.5%), economic activity (19.5%), public order, security, and the judiciary (15.5%), education (12.9%), healthcare (7.0%), general government functions (5.7%), and social protection and social security (0.9%). Expenditures for housing and communal services decreased by 54.1%. • The actual expenditures of the State budget of Ukraine totaled UAH 153.3bn in January-April 2015, which is 20.4% or UAH 26.0bn more year-on-year. Actual expenditures totaled UAH 44.5bn in April 2015, which is 29.4% more year-on-year. In terms of expenditures by functional classification, the following changes occurred compared to April 2014: – expenditures for general government functions, without expenditures for State debt servicing, increased by 1.7% to UAH 1.4bn. State debt servicing expenditures totaled UAH 7.8bn or 2.1 times more year-on-year; – expenditures for defense increased 2.9 times to UAH 3.9bn; – expenditures for public order, security, and judiciary rose by 15.4% to UAH 3.5bn; – expenditures for economic activity decreased by 0.7% to UAH 2.3bn; – expenditures for environmental protection increased 2.2 times to UAH 416.5mn; – expenditures for healthcare decreased by 6.3% to UAH 531.2mn; – expenditures for spiritual and physical development rose by 61.3% to UAH 1.4bn; 4 – expenditures for education increased by 2.3% to UAH 2.3bn; – expenditures for social protection and social security fell by 1.3% to UAH 8.1bn. In order to cover the Pension Fund deficit for payment of pensions, the amount of UAH 1.7bn was remitted from the State budget, which is 9.1% less year-on-year. • The State budget proceeds from repaid loans totaled UAH 234.0mn in April 2015, including proceeds of the General fund of the State budget of UAH 178.6mn; The amount of loans provided from the State budget totaled UAH 1.1bn in April 2015. • The State budget ran a surplus of UAH 4.0bn in April 2015. • The State budget debt principal repayment totaled UAH 22.6bn in April 2015, including internal debt repayment of UAH 19.3bn and external debt repayment of UAH 3.3bn. State borrowing for financing the State budget deficit was incurred at UAH 24.1bn, including internal market borrowing of UAH 13.6bn, and UAH 10.5bn received from external sources. In addition, the special borrowing fund received UAH 840.0mn for financing joint development projects with international financial institutions. Also, internal government bonds totaling UAH 13.6bn were issued for: – increasing the authorized capital of NAK Naftogaz of Ukraine national joint-stock company pursuant to Article 19 of the Law on the 2015 State budget and Decree of the Cabinet of Ministers of Ukraine dated 23 January 2015, No.13; – additional capitalization of PAT AT Ukrgazbank (according to the Decree of the Cabinet of Ministers of Ukraine dated 18 March 2015, No.115, and Article 16 of the Law on the 2015 State budget); and – providing a loan to the Personal Deposit Guarantee Fund according to the Decree of the Cabinet of Ministers of Ukraine dated 4 April 2015, No.156, and Article 17 of the Law on the 2015 State budget of Ukraine). • The State budget received UAH 9.5mn in proceeds from the privatization of State property in April 2015. • Total local budget revenues (without inter-budget transfers) amounted to UAH 36.8bn in January-April 2015, which is 14.3% more year-on-year. These revenues totaled nearly UAH 9.0bn in April 2015, which is 9.5% more year-on-year. As usual, personal income tax was the single largest source of local budget revenues. It generated UAH 4.4bn of revenues in April. The payment for land provided UAH 1.2bn. The highest revenue growth rate by region was in Volyn Oblast, where it rose 46.4% year-on-year. Revenue declined in two regions: Luhansk and Donetsk Oblasts by 53.2% and 43.4%, respectively. • The local budget expenditures (without inter-budget transfers) totaled UAH 73.5bn in January-April 2015, which is 5.5% more year-on-year. Expenditures increased by 9.7% in April 2015 against April 2014 and totaled nearly UAH 21.0bn. The largest amounts of local budget expenditures were allocated for education, social protection and social security, and healthcare. In April 2015, they amounted to UAH 7.1bn (or 33.9% of all local budget expenditures), UAH 5.6bn (or 26.7%), and UAH 4.6bn (or 21.8%), respectively. The highest growth rate by region was in Sumy Oblast, where the amount of expenditures increased by 32.5% year-on-year. At the same time in two regions, namely, Luhansk and Donetsk oblasts, expenditures declined by 62.1% and 49.1%, respectively. ________________________________________________ The 2015 indicators are not fully comparable with similar indicators of the respective period in 2014 due to absence of official statistics for the Autonomous Republic of Crimea and the city of Sevastopol after 1 May 2014. 5 State Budget Revenue Graph 1 State Budget Total Revenue Monthly Trends in 2010–2015 (Less Intergovernmental Transfers) 64000.0 2010 2010* 2011 2012 2013 2014 2015 56000.0 52 855.6 49 449.4 48000.0 40000.0 37 995.7 n 32000.0 UAH m UAH 24000.0 22 345.6 16000.0 8000.0 0.0 July May June April March August January October February December November September *excluding the amount of VAT reimbursement debt of Hr 16.4bn Diagram 1 Dynamics of the Share of Ukraine’s State Budget Revenue in Annual Amounts in 2010–2015 January 4.7 8.0 11.1 10.4 2015* February March