Fitch: Ukraine needs to curb budget spending

Fitch: Ukraine needs to curb budget spending

The main outstanding issues for Ukraine to finalise the review of IMF Extended Fund Facility (EFF) are potential modifications to the 2018 budget to meet the programme's 2.5% of GDP deficit target, and adjusting household heating tariffs. 

"Revenue performance improved in 2Q18, but expenditure under-execution will probably be required to meet the deficit target," reads the Fitch Ratings press release.

Fitch recalls that the Ukrainian government extended in July the freeze of residential gas prices for one month and discussions on the tariff formula are ongoing.

However, the talks might be “complicated by political considerations, given the approaching heating season and elections due in 2019,” Fitch notes.


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