Ukraine's Finance Ministry Submits New Budget, Hoping to Avoid IMF Freeze

Ukraine's finance ministry has submitted its new budget proposal, which it hopes will allow it to avoid a freeze of IMF funding over disagreements with the country's parliament.

Ukraine's new budget totals $28.1 billion with a $3.4 billion deficit, according to a new document issued by the country's finance ministry.

To accommodate the country' new tax system, the finance ministry seeks $2.5 billion in budget cuts, while the country's parliament seeks to cut $8.4 billion. The finance ministry considers the cuts unsustainable.

The International Monetary Fund has frozen another $1.7 billion tranche for Ukraine because of disagreements over tax reforms.

Both the parliament and the finance ministry seek to have a military budget of between $3.5 billion and $7 billion, which could make it total more than a third of the national budget if the parliamentary cuts are passed.

According to IMF projections, Ukraine's nominal GDP for 2015 is estimated at around $90.1 billion. The economy is expected to surpass its 2010 levels by 2020, according to its estimates.

New IMF funds may also be frozen if Ukraine fails to repay the $3 billion it owes Russia.