The state budget of Ukraine for January-October 2022 was executed with a deficit of UAH 638.7 billion, including the general fund – UAH 643.4 billion against the deficit of UAH 1,121.6 billion planned by the general fund for January-October 2022 hryvnia, said the Ministry of Finance.
“In October, the actual deficit of the state budget amounted to UAH 143.4 billion, including the general fund – UAH 147.1 billion,” the agency said in a release on Tuesday.
According to the operational information of the State Treasury, as indicated by the Ministry of Finance, in January-October 2022, the cash expenditures of the state budget amounted to UAH 1,978.6 billion, including the general fund – UAH 1,817.4 billion, or 86.4% of the list of the reporting period .
“At the same time, in October 2022, cash expenditures of the state budget were made in the amount of UAH 231.7 billion, including the general fund in the amount of UAH 222.5 billion,” the Ministry of Finance specified.
According to him, the income of the general fund in October amounted to UAH 72.8 billion.
Financial support commitments undertaken by Ukraine’s partners and the actual allocation of funds are still very different, which creates a liquidity problem and the threat of further monetary financing of the state budget deficit by the National Bank with all the negative consequences for inflation, exchange rate and macro stability, Finance Minister Sergei Marchenko said.
“You know perfectly well that there is a huge difference between commitments and payments… The first quarter of 2023 is the most problematic for us right now… Even a huge amount of commitments will not help us in the first quarter of 2023 (if these funds are not provided),” he said in Wednesday at the discussion “War in Ukraine: Financing the Victory” organized by the think tank Bruegel.
The day before in Berlin, at the International Expert Conference on the Reconstruction of Ukraine, the minister said that Ukraine’s fiscal and quasi-fiscal financing needs in the first quarter of 2023 are estimated at $11.4 billion. Of these, $4.2 billion is for gas purchases: January – $1.9 billion, February – $1.4 billion and March – $0.9 billion.
In total, the financing needs are: January – $4 billion, February – $4.1 billion and March – $3.3 billion, the Finance Minister’s presentation said. According to it, in the remaining months of 2023, they are estimated from $2.1 billion in August to $3.9 billion in June, for a total of $37.9 billion.
Marchenko recalled that in April 2022, it was agreed with international partners that the monthly gap in Ukraine this year is estimated at $5 billion a month, but the actual payment of funds is far from this figure. “For example, in April there were only $1.7 billion, in May – only $1.5 billion, in June – $4.4 billion, in July – $1.7 billion, in August – $4.7 billion, in September – about $2 billion.” , – stated the head of the Ministry of Finance.
According to him, if by the end of this year the EU’s macro-financial assistance (about EUR3 billion – IF) and the funds announced by the United States ($7.5 billion – IF) are allocated, then the Ministry of Finance will feel comfortable.
“But again, this does not mean that we will be able to cover all our expenses before the end of the year. It only means that we can manage the liquidity gap … we are able to meet critical expenses, while other expenses can be deferred,” Marchenko said.
He recalled that for 2023, the Ministry of Finance estimates the need for additional external financing of socially necessary budgetary spending in the amount of $3-3.5 billion, excluding emergency recovery costs, the likelihood of an increase in the background of the latest record Russian strikes on civilian infrastructure.
According to the minister, the commitments to allocate EUR 1.5 billion per month by the European Union in 2023 and EUR 18 billion in total for the year, which were taken the day before by the President of the European Commission Ursula von der Leyen, make it possible to assume a solution to this problem.
“But again, it is important for us to plan ahead. It is not yet clear whether we will be able to use this money in the first quarter of 2023,” Marchenko said.
He said that he discussed this issue at a meeting with the Minister of Finance of Germany, with the ministers of other countries.
“If you are ready to support Ukraine, please do it faster, because while you spend some time creating a solution, we do not have time. January is just around the corner, and January is not covered,” the head of the Ministry of Finance stressed.
He added that he expects to be connected to US funding. “But again, it’s not clear to me when the money can be paid, and if not, we have to find other options, we’ll look at another perspective, perhaps with bilateral creditors, etc. That’s why predictability is so important,” Marchenko added.
The government of Ukraine plans to attract $37.9 billion to finance the state budget deficit and $13.6 billion for restoration, the largest contribution is expected – $18 billion and $6.5 billion respectively – from the United States through USAID, such data are given in the presentation of the project state budget-2023.
According to information on the website of the Ministry of Finance, it is assumed that assistance from the United States will be monthly: for the budget – $1.5 billion, and for recovery – from $0.4 billion to $0.6 billion.
The second most important source of budget financing in the presentation is the IMF – $ 15 billion: $ 2 billion each in January, February and September, $ 1.6 billion in June, $ 0.6 billion – in August and from $ 0.8 to 1.1 billion – in the rest months.
As for macro-financial assistance from the EU and other sources, it is expected to be restored in the amount of $7.1 billion – monthly at $0.6 billion, except for $0.5 billion in December. While state budget funding from this source is projected at $4.9 billion: $1.9 billion in the first quarter, $1.3 billion in the second, $0.2 billion in the third and $1.3 billion in the fourth.
Finance Minister Serhiy Marchenko specified that this year, as part of negotiations with international partners, Ukraine has already received $19 billion in financial support, of which almost 50% is grant funds.
“By the end of the year, we plan to raise about another $17 billion in additional funding,” he said, presenting the draft state budget in the Rada on Wednesday.
The project of Ukraine, a warring country, for 2023 was developed by the Ministry of Finance and supported by the Cabinet of Ministers, said Finance Minister Serhiy Marchenko.
“The 2023 state budget is the budget of a country that will become stronger, strengthen its defense capabilities, be able to recover from the damage caused by Russian armed aggression, and also take care of citizens in need,” he wrote on Facebook on Tuesday.
According to the Budget Code, the government must submit the draft state budget to the Verkhovna Rada by September 15.
Since the start of Russia’s full-scale invasion of Ukraine, the Kyivstar mobile operator has paid UAH 4.246 billion in taxes and fees to the state budget, including UAH 1.682 billion ahead of schedule, the company’s press service said on Tuesday.
According to the operator, today Kyivstar has connected more than 1,200 bomb shelters in different cities of the country to free wired Internet, and also transmitted more than 300 million State Emergency Service messages with vital information to the population.
In addition, the company transferred over UAH 33 million to the humanitarian needs of the military, hospitals, the elderly and those affected by the war. The operator’s subscribers, using short numbers and the Smart Money service, transferred more than UAH 3.2 million for humanitarian needs of hospitals and the military, the press service clarifies.
“More than 90% of the company’s network functions stably and provides subscribers with communication and high-speed Internet services. To do this, in the first quarter of 2022, the operator invested UAH 659 million in the development of communications. During the hostilities, the company built 110 new mobile communication facilities and improved 4G communications in 3,500 settlements,” the report says.
According to the operator, during the war, the company’s subscribers were provided with free services worth UAH 429 million. Subscribers in 30 countries of the world receive communication services at the same tariffs as in Ukraine.
In addition, Kyivstar provides doctors working in risk areas with free mobile communications.
National Nuclear Generating Company Energoatom paid UAH 11.3 billion to the state budget in January-May 2022, which is twice the figure for the same period last year.
“Thanks to such indicators, Energoatom ranked third among all taxpayers in Ukraine and received special thanks for the financial support of Ukraine from the Central Interregional Department of the State Tax Service for Work with Large Taxpayers,” the company said on its Telegram channel on Monday.
As reported, Energoatom paid more than UAH 4.8 billion to the state budget in the first quarter of this year, which is a third or almost UAH 1.2 billion more than in the same period last year.
