Economic Growth by Conservative Estimates

In drawing up the 2005 state budget, Ukraine’s Ministry of Finance proceeds from a conservative estimate of GDP growth-8.6%, said Vice-Premier and Minister of Finance of Ukraine Mykola Azarov on September 8. He explained that this conservative outlook was based on the presumption that the GDP might fundamentally rise-by 12.5- by the end of this year. Compared to the 2004 budget, next year’s budget will be more oriented toward the social sphere and local budgets. Mr. Azarov emphasized that if the 2005 budget is not passed before the presidential elections, this will destabilize this country’s financial system for at least three months. He singled out several factors that may entail additional expenditures, compared to 2004: a new minimum wage of 262 hryvnias (additional expenses are an estimated UAH 5 billion), a number of new pension insurance fees (UAH 2 billion), as well as other payments and social guarantees (UAH 1 billion).