The Council of Ministers presented the draft State Budget for 2021

The government expects an economic recovery, but GDP will continue to rise to 2019 levels.

The Ukrainian economy will grow 4.6% in 2021 and nominal GDP will amount to 4.505.9 billion UAH. The Cabinet of Ministers established such a forecast in the state budget project, presented on Monday, September 14.

Finance Minister Sergei Marchenko said revenue growth of 9.4% is expected. Revenues will amount to UAH 1 trillion 071.1 billion, expenses UAH 1 trillion 350 billion. The deficit is 270 billion UAH.

“We have reduced the level of deficit compared to the current year by between 1.5% and 6%,” said Marchenko.

He added that the tax increases are not planned for next year. The redistribution through GDP through the budget is reduced to 23.5%.

According to the project, the minimum wage will increase by 30% in 2021. An increase in two stages is planned from January 1 to 6,000 UAH and from July 1 to 6,500 UAH.

The document also foresees an increase in the weighted average official salary of an employee of the first rate category of the Unified Rate Schedule by 30%, from January 1, 2021 to UAH 2,670 and from July 1, 2021 up to 2,893 UAH. Median wage growth is also set at 13,632 UAH in 2021. Real wages (adjusted for inflation) are expected to grow by 12.1% in 2021.

The Cabinet of Ministers forecasts that inflation in 2021 will accelerate to 7.3%. At the same time, the unemployment rate will be 9.2% according to the methodology of the International Labor Organization.

Note that the draft state budget is calculated at the exchange rate of 29.1 UAH per dollar.

“The dollar exchange rate at which the budget is calculated is 29 hryvnias. We have agreed on this figure with the National Bank,” explained Marchenko.

We would like to recall that previously S&P confirmed Ukraine’s ratings at “B”. Analysts predict a 6% decline in Ukraine’s GDP this year and economic growth in 2021.

MEDT: Ukraine can return to economic growth by the end of the year

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