Mykola Azarov told a press conference the 2007 draft budget put revenue at 180 billion hryvnas ($36 billion) and spending at 196 billion hryvnas ($39.2 billion). The projected rate of GDP growth is 6.5% and the inflation rate is 7.5%.
The deputy prime minister said the budget deficit would be covered with domestic and foreign borrowing.
The planned privatization of state-owned companies is expected to bring some 10,000 billion hryvnas ($2 billion) into the treasury's coffers next year, and that money will go to develop the country's infrastructure, he said.
He also said that wages in the public sector will be raised to make sure they stay ahead of inflation.
Azarov said Ukraine is going through a transitional stage, during which it has to redress the balance between economic and social development, stabilize the macroeconomic situation and kick-start the economy.
The Ukrainian economy, driven largely by the fuel-intensive heavy industry, is struggling to overcome the aftermath of a gas dispute with Russia, which raised the price of its natural gas supplies to market levels in 2006.
An internal political crisis following parliamentary elections in March has also weakened the country's economy.
