You're reading: Finance Ministry: Ukraine’s national budget deficit to fall to 1% of GDP in 2013

Ukraine's national budget deficit will fall from 1.6% of GDP in 2012 to 1% of GDP in 2013, forecasts the Finance Ministry of Ukraine.

"The reduction in the national budget deficit to 1% in 2013 and 1.5% in 2014 will provide moderate growth in the state debt, which will not exceed the GDP growth rate. Retaining this deficit level is to be achieved through increasing budget revenues and optimizing budget expenditures," a statement from the ministry reads.

The sources of financing the deficit will be foreign and domestic borrowing, as well as funds from the privatization of state property. It is planned to keep the state debt level at 28% of GDP in 2013 and 2014.

In addition, the ministry forecasts there will be a decrease in the share of GDP redistribution through the consolidated budget, from 28.5% in 2012 to 27.2% in 2013, and 25.6% in 2014, which will reduce the fiscal pressure on the economy and provide additional investment resources.

The retention of the share of state investment at 5% of GDP, according to the ministry, will allow UAH 85 billion and UAH 94 billion to be raised in the economy in 2013 and 2014 respectively. The funds will be spent on the implementation of national projects, the construction and reconstruction of education, healthcare, culture and sports facilities, as well as providing citizens with housing, and developing infrastructure, including that of energy, roads, and transport.