Draft 2013 national budget based on GDP growth forecast at 3.4%, 4.8% inflation, says Finance Ministry

The draft national budget for 2013 was drawn up with a view to the worsening of external market conditions, and is based on the forecast of gross domestic product (GDP) growth of 3.4% and inflation (December to December) of 4.8%, First Deputy Finance Minister Anatoliy Miarkovsky has said, while presenting the new draft national budget for 2013 at the Verkhovna Rada, Ukraine's parliament.

"The government took as a basis the first scenario (of development based on the IMF World Economic Outlook), which foresees the implementation of relevant economic reforms and maintaining a high economic growth rate," Miarkovsky said on Tuesday.

According to the official, nominal GDP in 2013 is forecast at UAH 1576 billion.

Miarkovsky also said that state borrowing in 2013 is foreseen at UAH 129.4 billion, including external borrowing of UAH 36.5 billion and domestic borrowing of UAH 92.9 billion.

"The deficit of the national budget is expected at 3.2% of GDP… We find the proposed level of deficit optimal," he said.

The official also said that revenues of the consolidated budget (the state and local budgets) would amount to UAH 463.1 billion, or 29.4% of GDP.

Miarkovsky also said that revenues of the national budget in 2013 would amount to UAH 359.9 billion, although the sum was indicated as UAH 361.51 billion in the wording of the draft national budget that was submitted to parliament. However, the official did not explain why the figures differed.

Miarkovsky did not mention the forecasts under a pessimistic scenario for the country's economic development. He just said that it was based on the current economic crisis in the world.

As reported, on September 12, 2012 the government approved and submitted to the Verkhovna Rada the draft state budget for 2013. However, after discussion with the parliamentary budget committee, Rada Speaker Volodymyr Lytvyn returned the document for revision.

The government forecast the growth of gross domestic product in real terms in Ukraine in 2013 at 4.5% (the nominal volume is UAH 1.688 trillion) with inflation forecast at 5.9%.

During a discussion of the draft national budget for 2013 on December 4, MPs raised the question of whether they document could be considered, taking into account the fact that on December 3 the president accepted the resignation of the Ukrainian government. Under Article 155 of the parliamentary regulations, the new government should develop the draft national budget if the previous one has resigned.

While commenting on the issue, Lytvyn said that the government thinks that the draft 2013 national budget was submitted before its resignation.

"I had a conversation on the issue with lawyers – there is no simple interpretation," he said.