Budget revenues are continuing to fall in Ukraine, with the state presently owed more than Hr 6 billion ($3 billion) in taxes and other payments, a government official said Tuesday.
Deputy Finance Minister Volodymyr Matviychuk told parliament that June revenues amounted to Hr 785 million ($392.5 million) instead of the planned Hr 960 million ($480 million).
In addition to the budget debts, which grew by 2.6 times since the beginning of 1998, enterprises and companies owed about Hr 1 billion ($500 million) to the State Pension Fund.
That debt grew by Hr 43.2 million ($21.6 million) in June alone, Matviychuk said, according to the Interfax news agency.
Other pressures on the cash-strapped budget included Hr 1.2 billion ($600 million) in foreign and domestic debt payments that the government had to cover in June, and emergency payments to defuse protests by striking coal miners, the official noted.
Ukraine hopes to secure about $875 million in new foreign loans to cover the mounting budget debt, but so far has not been able to attract new credits from abroad, Matviychuk said.
Ukraine is negotiating a $2.5 billion International Monetary Fund loan, and the government has moved to slash the planned budget deficit to about 2.3 percent of gross domestic product and bring down spending, thus fulfilling IMF demands and reflect the shortage of revenues.
The IMF has been reluctant to approve the loan, citing Ukraine's stalled economic reforms and the need for structural changes.
The budget cuts, however, remain to be approved by the largely leftist parliament after Cabinet presents it with the new draft. Cabinet officials voiced skepticism this week about the measure's chances to pass.
One major problem facing Ukraine's government is over Hr 4 billion ($2 billion) in redemption payments for domestic bonds it has to release by the end of 1998. Foreign investors are wary of Ukraine's financial markets and are believed to use the money to buy foreign currency rather than re-invest in bonds.
That has increased pressure on the hryvna, which began falling slightly in recent days against the U.S. dollar. To combat the trend, the National Bank announced Monday that it was raising key interest rates from 51 percent to 82 percent.
