Budget Chronicles: 2nd quarter 2015 Budget Analysis

In second quarter 2015 budget revenues maintained impressive growth. In particular, general budget revenues increased 41.0% y/y up to UAH 158.4 billion (UAH 112.3 billion a year ago). However, the key sources of revenues’ growth have changed. In second quarter good results have been reached due to: (a) high inflation, (b) tripled revenues from the NBU, (c) import duties, (d) low comparative base (a year ago the conflict at the East started). Partially the speed up in revenues in second quarter 2015 stems from low comparative base due to absence of annexed Crimea.

In second quarter 2015 general budget spending increased 20.1% y/y and reached UAH 159.2 billion. To compare, in first quarter 2015 general budget spending increased 12.9% up to UAH 126.0 billion.

As a result, general budget surplus shrunk to UAH 12.3 billion by the end of June compared to UAH 14.0 billion by the end of March. Recall, according to the spending plan 2015 general budget deficit is targeted at UAH 73.1 billion (4.2% GDP).

For more details about the execution of the budget in the second quarter of 2015, read our traditional report “Budget Chronicles: 2st Quarter 2015”.