Budget deficit widens to Hr 28 billion; Public debt inches up in October; Gas import price could surge to $337.
Budget deficit widens to Hr 28 billion
Ukraine’s consolidated budget deficit widened to Hr 28.4 billion, or 3 percent of gross domestic product, in January-October from Hr 25 billion in the first nine months of the year as revenues over the period totaled Hr 217.4 billion and spending stood at Hr 243.7 billion. Revenue collection improved somewhat in October as its pace of decline slowed to 9 percent year-on-year (to Hr 22.4 billion) compared to a 26 percent drop in September. However, the breakdown of October revenues shows that most of the improvement was attributable to weaker value added tax refunds, which slid to the lowest level this year, rather than better tax collection. Spending remained unchanged in October compared to the month before, at Hr 26.2 billion (down 10 percent compared to October 2008), bringing the monthly budget gap to Hr 3.8 billion (versus Hr 7.1 billion in September).
Public debt inches up in October
Ukraine’s total public debt inched up 0.7 percent in October to $35.2 billion, including about $11 billion of liabilities to the International Monetary Fund, bringing its growth since the beginning of the year to 43 percent. The latest debt figure equals roughly 30 percent of GDP, still well below the internationally-recognized safety level of 60 percent of GDP. Internal liabilities rose by 2 percent in October to $10.5 billion, as the government continued to issue domestic debt, but foreign debt remained virtually unchanged. However, public debt statistics for November will show a substantial increase in foreign liabilities due to the government providing its guarantees for $1.6 billion of Eurobonds issued by state oil and gas monopoly Naftogaz Ukrainy in the process of debt restructuring. Other than that, public debt is not expected to change substantially for the rest of the year as new external financing for Ukraine is very unlikely as long as the IMF keeps its lending program for the country on hold.
Gas import price could surge to $337
Domestic oil and gas monopoly Naftogaz Ukrainy estimates the average price of imported Russian gas for Ukraine in 2010 in the range $295-337 per 1,000 cubic meters (tcm) on the Ukrainian-Russian border. The announcement is in line with analyst estimates but higher than $280/tcm earlier projected by Gazprom. In 2009 the gas price for Ukraine has averaged about $230/tcm. In related news, Naftogaz plans to import 7.6 billion cubic meters (bcm) of Russian gas in November-December, paying $1.6 billion, and buying 7.0 bcm in the first quarter of 2010 at an estimated cost of $2.1 billion.
