Ukraine. 2017 State Budget passed

22.12.2016

Overnight into December 21 the Verkhovna Rada (Parliament) passed the State Budget for 2017.

Fiscal revenues for 2017 are envisaged at UAH 721.4 Bl and expenditures at UAH 790.4 Bl. The budget deficit was set at UAH 77.5 Bl.

The following macroeconomic indicators are proposed for 2017:

·  GDP growth at 3-4%

·  inflation at 8.1%

·  forecast public debt at 66.8% of GDP

·  the hryvnia exchange rate at UAH 27.2/USD

Like in the previous years, the Budget was passed with “technical legal corrections.” This means the document does not yet exist in its final version – it will appear in a while after the Parliament’s relevant services integrate these corrections. Therefore numerous and substantial misreadings are probable (and even inevitable) in comments to the Budget, UkrAgroConsult experts report.

Supposedly, a total of some UAH 7.2 Bl will go to the agricultural sector in 2017, and UAH 4.8 Bl will be spent on budgetary support to agricultural producers. However, this is the most optimistic scenario because agricultural expenditures are mainly attributed to a special fund to be filled with revenues from privatization and special confiscation. The Verkhovna Rada has not yet adopted the law on special confiscation though.

Noteworthy is that budgetary support or subsidies for agricultural producers in 2017 are introduced for the first time in all the history of Ukraine. Observers believe this mechanism will allow minimizing losses that will result from the liquidation of the special agricultural taxation regime. This regime will be cancelled from January 1, 2017 as demanded by the IMF.

 

UkrAgroConsult

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