1 Nov 2022 11:50

Ukrainian govt revises 2023 GDP forecast down to 3.2% in updated draft budget - PM

MOSCOW. Nov 1 (Interfax) - The Ukrainian Cabinet of Ministers has amended a 2023 draft budget before its second reading by the Verkhovna Rada, Prime Minister Denis Shmygal said on Monday.

In particular, the government revised its 2023 GDP growth forecast down to 3.2% from 4.6% and improved the inflation forecast to 28% from 30%, Shmygal wrote on Telegram.

"The government has taken proposals from people's deputies [lawmakers] into consideration while adopting a 2023 draft budget for the second reading. Now we are expecting the Verkhovna Rada [...] to vote on it soon," he said.

The 2023 draft budget envisions revenues of 1.3 trillion hryvni, Shmygal said. "Owing to adjusted macroeconomic indicators and tax amendments, we have proposed increasing the revenues by more than 50 billion hryvni," he said.

The 2023 budget expenditures will total 2.6 trillion hryvni, Shmygal said. "We've increased expenditures on pensions, construction, renovation, the purchase of housing for people, scientific and technological activities, and subsidized mortgage loans for internally displaced persons. In all, the expenditures in the draft budget have been increased by 66.8 billion hryvni," he said.

Security and defense remain a top priority, he said.

"We're earmarking over 1 trillion hryvni for these purposes, which is more than 18% of GDP. We're financing the Ukrainian army on our own, using internal resources," he said.

The budget will see a deficit of over 20% of GDP next year, Shmygal said. "We'll be covering it owing to help from our partners. We need to raise $38 billion. We'll get it from the EU, the U.S., the IMF, and other donors. We're moving in this direction, and there is every reason to expect progress," he wrote.

As reported earlier, a 2023 draft budget endorsed by the Ukrainian government in September envisioned revenues of 1.279 trillion hryvni, expenditures of 2.573 trillion hryvni, and a deficit of about 20% of GDP.

Meanwhile, Yaroslav Zheleznyak, deputy head of the parliamentary Finance, Tax, and Customs Policy Committee, said the 2023 draft budget adjusted by the government for the second reading envisions revenues of 1.329 trillion hryvni, expenditures of 2.581 trillion hryvni, a budget deficit limit of 1.297 trillion hryvni, or 20.6% of GDP, and a state debt limit of 6.423 trillion hryvni.

The minimum subsistence level has been set at 2,589 hryvni and minimum wage at 6,700 hryvni.

As reported earlier, the government endorsed a 2023 draft budget for its second reading by the parliament at a meeting on October 31. Its text has not yet been published on the Verkhovna Rada website.

The budget is expected to be adopted in the first half of November.