“The plan to finance the increase in state budget expenditures in 2024 by UAH 216 billion at the expense of the domestic government bond market (OVDP) seems unlikely”, — write: www.epravda.com.ua
The plan to finance the increase in state budget expenditures in 2024 by UAH 216 billion at the expense of the domestic government bond market (OVDP) seems unlikely, because it will require a very sharp increase in the volume of sales at primary auctions, but there are revenues from a possible 50% income tax in reserve banks
Such an opinion expressed head of the Budget Committee of the Verkhovna Rada, Roksolana Pidlas, interviewed by the Interfax-Ukraine agency.
“We calculated that for its (plan – ed) implementation, the Ministry of Finance should place UAH 27 billion at each auction by the end of the year. I think this is unlikely, because the average figure for all auctions, according to my calculations, is 10.3 billion UAH, however, at the last four auctions, 20.5 billion UAH, 20.3 billion UAH, 13.8 and 17.8 billion UAH were raised, respectively,” she said.
Podlasa reminded that after the adoption of the law No. 11417 on the increase of the expenditures of the state budget-2024 by almost UAH 500 billion for security and defense, the internal borrowing plan was increased to UAH 742 billion.
At the same time, the head of the committee noted that the National Bank of Ukraine helped in this matter thanks to its latest decisions on increasing the standard of mandatory reserves and the limit of coverage of reserves by government bonds.
“Plus, the Ministry of Finance constantly consults with banks and actually asks them to buy OVDP. This all helps, but, again, I don’t think that the plan will be implemented 100%,” she summarized.
At the same time, Pidlasa specified that the norm on increasing the bank profit tax this year from 25% to 50%, adopted in the first reading of draft law No. 11416-d, was not taken into account when calculating revenues in the amendments to the 2024 state budget.
According to her, UAH 28 billion of additional revenues from such an increase can compensate for the failure to fulfill the plan for placing OVDP.
The head of the budget committee also agreed with the opinion of the Ministry of Finance that the resource of the OVDP market for further financing of the state budget after the end of 2024 is practically exhausted, and the main source remains external financing.
We will remind:
The amendments to the 2024 state budget approved in mid-September provide for additional financing of the deficit by the end of the year by UAH 216 billion at the expense of the OVDP market: the volume of attraction has been increased to UAH 742.02 billion for repayments of UAH 386.01 billion.
The government project of the state budget-2025 provides for the placement of OVDP bonds for UAH 579.22 billion with a repayment volume of UAH 561.98 billion.