WEDNESDAY, JULY 18, 2018
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New govt 2006 budget increases reliance on development projects
Journal Staff Report

KIEV, Sept. 12 - The Finance Ministry has amended Ukraine’s draft 2006 budget by significantly increasing spending on development projects that aim at boosting economic growth, acting Finance Minister Viktor Pynzenyk said Monday.

President Viktor Yushchenko, at a meeting with acting Prime Minister Yuriy Yekhanurov and Pynzenyk on Monday, said the moves were steps in the right direction.

The ministry will spend on development projects, aimed at stimulating economic growth, by 17.4% to 25.6 billion hyrvnias in 2006, Pynzenyk said.

The spending on consumption, including on social projects, will grow 9.8% to UAH101.6 billion, Pynzenyk said.

Yushchenko had been critical of the former government, led by Yulia Tymoshenko, for planning a largely populist budget to please voters ahead of the March 2006 general election. He said this has been affecting business confidence and leading to economic slowdown.

Yushchenko sacked Tymoshenko Sept. 8 and replaced her with moderate Yekhanurov. He also urged the new government, which is to be formed by Sept. 23-25, to run a pragmatic economic policy.

"There were positive changes in the budget," Yushchenko said at the meeting, according to his press service. "The [2006] budget will be based on deregulation of the economy and accelerating of investments."

The government is supposed to submit the draft 2006 budget to Parliament before Sept. 15, and it must be approved before the end of November.

The increased spending on development projects is expected to boost economic growth by 7% in 2006, up from expected 5% to 6% growth in 2005, according to officials. Consumer prices are expected to increase 8.7% on the year in 2006, compared with expected 9.8% increase in 2005, the officials said.

The Finance Ministry expects that the 2006 budget deficit will not exceed 2% of gross domestic product and will be covered through selling state assets. (jp/ez)

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USD 26.21 26.23
RUR 0.421 0.421
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