On March 23, the Government approved the report “On the execution of the state budget for 2015.“ For the first time in many years, in 2015 the Government successfully executed the Law on the state budget despite a number of challenges. For instance, the Ministry of Finance succeeded to make a number of important steps in the budgetary policy in 2015:
- for the first time in 4 years, the revenue plan of the state budget was met;
- the first stage of the budgetary decentralization was completed, the resources of the local budgets were increased;
- all key needs of the country were fully funded. First of all, it is funding of expenses on security and defense. Also, the increase of social welfare standards was implemented 3 months ahead of schedule; all social expenses were financed without delays;
- finally, last year the Ministry of Finance managed to change the negative trend of previous years and to significantly reduce the budget deficit. It was reduced from 78.1 billion hryvnas (4.9% of the GDP) in 2014 to 45.2 billion hryvnas (2.3% of the GDP) in 2015.
“In 2015 we managed to increase the budget revenues more rapidly than expenses; we also prevented the irresponsible increase of the budget deficit in the course of the year. This enabled us to consolidate our fiscal capacities and to reduce the budget deficit by one and a half”, Minister of Finance Natalie Jaresko commented during the presentation of the results of the state budget 2015 at the Government’s meeting.
During her presentation, the Minister also touched upon the importance of cutting the budget deficit (fiscal consolidation), which is crucial for the recovery of the public financial system and resumption of economic growth in Ukraine. According to Natalie Jaresko, the deficit-cutting policy will help Ukraine reduce its debt burden and slow down the pace of inflation. This will help re-gain investors’ confidence in "tomorrow’s day" resulting in more investments, more employment as well as in better conditions for the sustainable economic development of Ukraine.