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Ukrainian government drafts reform plan as basis for 2015 budget

September 15, 2014, 19:50 UTC+3 KIEV
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KIEV, September 15. /ITAR-TASS/. The Ukrainian government has drafted a reform plan that can provide the basis for the 2015 state budget and will urge the parliament to approve it at its meeting on September 16, Prime Minister Arseniy Yatsenyuk said on Monday.

The government has prepared two versions of the budget for next year. One is based on the current tax legislation. But ministers won’t support it as it is “a budget of economic decline, not stabilization”, Yatsenyuk said.

He said the second version could be more acceptable as it was based on the proposed reforms.

Finance Minister Oleksandr Shlapak said that Ukraine’s GDP would drop by no less than 6% in 2015, which he said would be “a good result” compared to the accelerated shrinking of the GDP in the second half of this year.

The government expects a decline of 7% in industry before the end of the year, the minister said, adding that the decrease in August was 12%. He also noted that inflation would reach 11% this year and the budget deficit would hover around 4.5%.

Shlapak said the government would do its best to reduce the budget deficit next year. He admitted that the state debt was coming close to 60% of GDP and “it would be extremely dangerous to cross this line”.

The government is now working on a joint program with the National Bank to keep the debt-GDP ratio stable next year. “We are strongly against increasing the state debt because servicing it is extremely painful for us,” he said.

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