agency Standard Poor `s reported that the continuing political risks in Ukraine after the elections will not prevent the new government to adopt the budget and to resume work with international creditors. This will allow the state to cover the budget deficit and minimize the risks of default. Ukrainian experts confirm the optimistic assessment of SP, since the volume of external payments in 2010 were negligible.

International rating agency Standard Poor `s (SP) said on Friday that despite the numerous threats to financial stability, the situation in the public finance of Ukraine in 2010 will gradually improve. Expected GDP growth of 4% and the resumption of cooperation with the International Monetary Fund (IMF) in late spring and early summer. Threat to the financial system of Ukraine will be political instability, change of the National Bank and the law “On state social standards and state social guarantees”.

SP

Experts believe that the law will not work because it will increase the budget deficit to 2,5-7% of GDP. At the same time, the remaining amount of the IMF loan in the amount of $ 5,500,000,000 will be able to cover only 5,5% of the budget deficit, and the possibility of attracting other external borrowing is limited. In 2010, Ukraine has to pay a foreign loan to 35.1 billion Japanese yen ($ 392.3 million), and therefore the SP continues to believe that “default Ukraine is not inevitable.”

No 2010 state budget, according to SP, a positive effect on financial stability. “This means that at least during the I quarter of 2010 the new government will be able to make expenditures in its sole discretion within the lower budget costs. In real terms, expenditure may even decline, as estimated NBU, the average inflation this year 14% “- the report says.

first threat PFM SP predicts the spring, due to the increase in payments on Treasury bills. In April the Ministry of Finance to pay the three bonds at 3.7 billion USD, while the lingering political standoff after the election will strengthen tenizatsiyu economy and reducing the tax base. In SP fear “risk increasing pressure on the National Bank”, and that in the Cabinet want to resolve the financial problems due to emissions, while the new head of the NBU could not resist the pressure.
Ukrainian experts believe the threat called SP maloaktualnymi.

“As practice shows, tenizatsiya economy is in a standby political instability, and therefore further tenizatsii fear is not worth it. In addition, legislation to raise the social standards already in force, but this has not led to an increase in budget spending,” - says General Director of the Institute budget and socio-economic research Irina Shcherbina. “In the SP believes that with prudent fiscal policies of all these risks are negligible. We also believe that after the elections the new government must adopt a budget which would suit the IMF, and therefore, support the Pension Fund and Naftogaz Ukraine” will no longer be a large. With the resumption of cooperation with the IMF will be able to unfreeze credit, World Bank ($ 750 million), and these funds should cover the budget deficit “- adds analyst BG Capital Vitaly Vavrischuk. Besides, he said, payments on domestic obligations in 2010, “smooth enough”, while on the outside - very small.

The exam for the new government

participants in the financial press club gathered to discuss economic issues that should decide the new power …

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