MOSCOW, July 21 (RIA Novosti) - The hole in the budget of the Ukrainian capital has reached 3.2 billion hryvnas ($274 million), up from 2.3 billion hryvnas in the first half of the year, Ukranews news portal reported, citing the head of Kiev’s mayoral advisers Igor Nikonov.
“The major problem of Kiev at the moment is budget deficit,” Nikonov said in an interview with Ukranews. “The hole in the capital budget is 3.2 billion hryvnas … this is not just a result of inefficient management. The Finance Ministry initially put indicators that raised concerns. Everybody expected income tax to increase up to 15 percent, but it didn’t happen and the growth was at just 5.5 percent that is 1 billion hryvnas deficit in the budget,” Nikonov said.
Ukraine’s Finance Ministry forecasts the country’s economy to slump by 6 to 6.5 percent in 2014, and inflation to reach 19 percent. The state budget of Ukraine adopted in January was based on growth expected to reach 3 percent and inflation to stand at 4.3 percent. In late March, the document was amended as the country’s economic situation deteriorated.
The new Ukrainian authorities claimed earlier that the state’s treasury was almost empty and announced widespread austerity in a bid to stave off mounting debt.
