You're reading: Finance ministry persuading IMF about realistic nature of draft national budget for 2013

The leadership of the Ukrainian Finance Ministry headed by Yuriy Kolobov and a technical mission of the European Department of the International Monetary Fund (IMF) on September 4, 2012 exchanged opinions on the key parameters of the draft national budget for 2013, the press service of the Finance Ministry has reported. 

“The IMF experts presented their own vision of the factors that will impact the development of both global and Ukrainian state finances,” the press service said.

“Kolobov, in turn, said that the draft national budget of Ukraine for 2013 has been drawn up to take into account current trends and global economic development forecasts,” the press service added.

The document does not have any other details of the discussion, or the forecast key indicators used in the draft national budget for 2013. However, at the end of last week, the Finance Ministry said that the projection that GDP will accelerate to 4.5% in 2013 was taken as a basis for the draft national budget.

The press release also says that the IMF mission positively assessed the government’s policy for further budget consolidation and balancing of debt policy.

A source in the government earlier told Interfax-Ukraine that at present, discussion on the appropriateness of revising the macro indicators forecasts for 2012 and 2013, which are used for the draft national budget for 2013, is being conducted. It was expected that experts from the technical IMF mission would be involved in it. The mission was working in Kyiv from August 29 to September 5, 2012.

The government in the national budget for 2012 foresaw growth of real GDP by 3.9% and inflation of 7.9%. Over the first seven months of 2012, the country’s GDP grew by 2%, with deflation was 0.1%, but GDP is expected to fall in the third quarter of 2012 compared to the same period last year.

The macroeconomic forecast approved in late August 2011 and revised in late November 2011 foresees GDP growth at 4.5%, with inflation of 5.9%.

According to the consensus forecast developed by the Economic Development and Trade Ministry in August 2012 on the basis of updated estimates by experts from 13 governmental and nongovernmental organizations, the average expert estimates of Ukraine’s GDP growth in 2012 dropped from 3.2% in April 2012 to 2.3% in August, while the inflation forecast (December to December) for 2012 was improved compared to April estimates, from 8% to 5.8%.

Ukraine’s GDP growth in 2013 is anticipated at 3.6%, while four months ago experts estimated it at 4.1%. For 2013, inflation was downgraded from 7.2% to 7.8% due to the expectations of a rise in tariffs on gas, electricity and heat next year.