Ukrainian parliament in a vote on June 16 rejected a draft budget policy for next year, saying it needs improvement and specific numbers. The decision followed a speech by Finance Minister Natalie Jaresko, who presented the document in Verkhovna Rada.
Ukraine’s government budget is roughly $25 billion this year — less than a third of New York City’s annual budget.
According to lawmakers, the budget resolution must include minimum salary and living wage, figures that Jaresko said are not possible now. “We’ve given you the forecast we were able to,” she said.
She noted three main budget goals ahead: restructuring debt to save $15 billion in payments over the next four years; bringing down the public and publicly guaranteed debt/gross domestic product ratio to under 71 percent of GDP by 2020; and keeping the budget’s gross financing needs at an average of 10 percent of GDP in 2019–25..
Ukraine hopes for two percent growth in gross domestic product next year, following two years of recession. The average exchange rate in 2016 will be Hr 22.5 per U.S. dollar, Jaresko said. Much depends, of course, on the outcome of Russia’s war against Ukraine.
“The budget will be very complicated,” she warned, saying that reforms are crucial for many sectors of economy.
Vasyl Amelchenko, deputy head of the Parliamentary Budget Committee, recommended lawmakers to pass the draft resolution.
“There is enough time left, we will see all the figures in the draft budget,” he said. “I hope the government will present the budget not on New Year’s Eve, as usual, but in September, as it supposed to be.”
Angela Bochi, economics analyst in the International Center of Policy Studies, says that “there is a problem with the ability of the Finance Ministry to build a high-quality forecast.”
Bochi said “it was logical to return the resolution for further development. But I am afraid we will get the budget in winter again.”
Kyiv Post staff writer Alyona Zhuk can be reached at [email protected]
