Azarov: Recession obliges Ukraine to correct macroeconomic figures for 2014 to make budget realistic

The Ukrainian government will consider on Thursday the question of correcting projected macroeconomic figures for 2014 in order to prepare a maximally balanced draft state budget, Prime Minister Mykola Azarov has said.

"The figures announced by the State Statistics Service indicate that we need to correct macroeconomic figures, taking into account the preparation of the draft budget for next year," he said, while opening a Cabinet of Ministers meeting in Kyiv on Thursday.

"We need to determine absolutely realistic figures of the budget for 2014 and enter next year with an approved financial plan of the state, because a balanced budget is a critical tool for improving the economic situation," Azarov said.

As reported, on September 14 the Cabinet of Ministers tabled in parliament the initial wording of the draft budget for 2014, but a few days later it was returned to the government. First Deputy Head of Ukraine's Presidential Administration Iryna Akimova said that the government had then approved the draft budget for 2014 with a deficit of 2.7% of GDP, forecasting economic growth of 3% and inflation of 8%.

In 2012, Ukraine's GDP growth slowed to 0.2% from 5.2% a year ago. The national budget for 2013 is built on the forecast of real GDP growth of 3.4% and nominal GDP growth to UAH 1.576 trillion with inflation of 4.8%, while the IMF worsened the assessment of the Ukrainian economy's growth from 3.5% to 0.4% in 2013, the World Bank – to a zero and EBRD expects that the decline will be 0.5%.

Deflation in ten months was 0.2%. Azarov earlier assessed the GDP decline in the first ten months of 2013 at 0.6%, although it expressed hope that by the end of the year the country will reach a zero rate.