IMF Resident Representative: Ukraine needs clear plan to reduce fiscal deficit

“Once the pandemic dissipates and the economy recovers, the fiscal deficit will need to return to pre-pandemic levels. This is important to instill confidence in Ukraine’s economy and reduce Ukraine’s borrowing needs,” IMF Resident Representative in Ukraine Goesta Ljungman said in an interview with the Interfax-Ukraine agency.

Ljungman noted that a strong fiscal position gave Ukraine room to provide fiscal stimulus in the case of a future downturn.

“So the question should not be if Ukraine should reduce the fiscal deficit, but when. And in order to do so, there needs to be already a good plan for how that would happen, including through well-designed tax measures,” the IMF Resident Representative in Ukraine noted.

As reported, the law on the state budget of Ukraine for 2021 stipulates revenues in the amount of UAH 1,092 billion and expenditures in the amount of UAH 1,328 billion. The maximum size of the state budget deficit was approved at the level of UAH 247 billion.

According to the report on the implementation of the state budget of Ukraine for 2020, presented in the Ministry of Finance on March 19, the state budget deficit was kept within the limit last year.

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