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Zelensky signed the state budget-2021, the National Bank warns about the risks of its non-fulfillment

President Volodymyr Zelensky signed the law on the state budget for 2021. The Verkhovna Rada adopted it on December 15 with 289 votes.

State budget revenues are determined at 1.084 trillion UAH, and that is 6.9% more than in 2020.

Subsistence minimum per person per month: from January 1—2189 UAH, from July 1—2294 UAH, from December 1—2393 UAH.

Minimum wage: in a monthly rate from January 1—6,000 UAH (in an hourly rate—36.11 UAH), from December 1—6,500UAH (39.12 UAH).

The public debt ceiling as of December 31, 2021 is 2,544,899.9 million UAH and the government-guaranteed debt ceiling is 350,489.7 million UAH.

The National Bank announced the risks of budget non-fulfillment. The December 2020 Financial Stability Report notes that the state budget is based on overly optimistic assumptions. Because of this, there is a risk of income shortfall, so, most likely, the budget will have to be adjusted. The planned budget deficit is also quite high both in absolute terms—246.6 billion UAH and in relative terms—about 5.5% of GDP.

"The government's ability to finance it will directly depend on access to loans in foreign markets and loans from international financial organizations," the report says.

The NBU is not planning to resort to indirect financing of the state budget deficit by increasing the government securities portfolio.

The risks of increasing public debt are extremely high. The ceiling for the provision of state guarantees in the state budget is set at 88.7 billion UAH, and that is three times the limit set by the Budget Code.

Additionally. Back in November, the National Bank said that the macroforecast that the government used in preparing the draft state budget for 2021 is unreasonably optimistic. Because of this, it is possible that the budget for revenues will not be fulfilled by 65 billion UAH.

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