Daily Insight-In the spotlight: state budget revenues growth, prospect for new cut; Kernel to expand production

Our calculations, supported by the Ministry of Finance report for 8M10, indicate that the government has had difficulties fulfilling the 2010 state budget according to plan: the gap between the actual and the planned fulfillment of the state budget currently stands at a level of UAH25bn, according to our estimates. That discrepancy will be difficult to fill, even with the announced privatisations, the largest of which, Ukrtelecom, is expected to generate around UAH13-15bn of proceeds (the original plan for proceeds from privatisation is set at UAH6.35bn in the Law on the State Budget of Ukraine 2010). So, the government may be pushed to make another budget cut before the year-end. In June, the government had already made a cut in the 2010 state budget, having reduced planned revenues 5%, to UAH252.727bn, which is 20.5% higher than the actual revenues, collected by the state budget in 9M09.