Expect from DFS records on fees, without which it would be extremely difficult to fulfill budget-2019.
The Ukrainian government will increase in 2019 their fiscal policies to dampen inflationary pressures on the economy. The forecast is contained in fresh price report of the national Bank. They are confirmed by the recent calculations of the state statistics: January inflation at 0.1% for the month and 9.2% in annual terms, informs Rus.Media.
“The state budget for 2019 is developed based on a rather conservative macroeconomic forecast. This was evident in the modest growth of revenues and expenditures compared to actual performance 2018 (10.6% and 12.8%, respectively). However, the high rate of expenditure growth compared to revenue), the deficit will widen from indicators 2018 to 2.3% of GDP primary balance will remain positive. The key risks are focused in financing. This applies not only to funds from privatization, but the planned volume of borrowing in both domestic and foreign markets”, – noted in the NBU.
In its analysts there is an obvious contradiction. They are counting on increased tax revenues 14.2% (compared to 2018). And noted a reduction in expenditure on housing subsidies: 15.9 bln, to UAH 55.1 billion. By the way, 20 billion UAH. of this amount will be paid in cash.
However, narbekovas concerned about the increase in 2019 the cost of funding the Pension Fund by 17.4 billion UAH. (up to 167,5 billion UAH.).
“This is due to planned indexation of pensions, and a strained budget of the Pension Fund in 2018. During the year the Fund received loans from the unified Treasury account to cover the liquidity gaps, the outstanding loans amounted to UAH 4.8 billion at the end of 2018”, – stated in the report of the NBU.
This increase is not the only one. According to Central Bank estimates, the overall increase of budget expenditures-2019 amounted to 90 billion UAH.
“On the one hand, this deficit is moderate and meets the requirements of the IMF (2.3% of GDP), on the other – significantly higher than the actual figure of 2018. In addition, in 2019 and 2020 have peak payments on external public and guaranteed debt. And given the large volume of placements of government bonds in 2018, which are dominated by short-term securities total financial needs of the state budget in 2019 will amount to 9.1% of GDP compared to 8.3% of GDP until 2018”, – emphasized in the national Bank.
Of course, a significant portion of debt payments will be funded by new loans. In 2019, the government expects to borrow on the international market of $5 billion and half more on the inner – 202 bln. The placement of bonds of internal state loan should exceed last year’s 15.9%, and therefore are held with the reserve – their total volume is 34% more current payments on government bonds. Perhaps the authorities are hedged in case of another failure of privatization, fees for which are not fulfilled for many years. And, perhaps, part of the borrowings (foreign currency) will be reserved for external payments in the event of deterioration in the global debt market.
The only possibility to somehow secure and to ensure the implementation of the state budget with one-time payments on the public debt is increasingly to collect taxes. Not only to fulfill the plan for dues, but surpass it. For example, due to shadowing and pulling all unaccounted for. Exactly how all this will be done and that this will be done in the Bank, of course, not misleading. The case of the DFS. However, the projected intensification of the tax and customs services.
“According to NBU forecast, fiscal policy in 2019 will be somewhat tougher in comparison with the planned parameters and with previous year”, – summarized in the report of the National Bank.