Daily Insight-In the spotlight: State budget deficit exceeds year plan in October, MoF bond auction today

Ukraine\'s state budget deficit reached UAH56.6bn in 10M10, or 4.6% over the full year\'s target, according to the Ministry of Finance\'s data, as reported by Interfax. The current level of the public deficit is more than 2x higher than in 10M09, but last year, the public deficit level was artificially suppressed due to the accumulation of unpaid VAT refunds. The state budget revenue realised only UAH184.4bn (US$23bn) in 10M10, or 73% of the year\'s plan, while state budget expenses equaled UAH240.7bn (US$30.3bn), or 78.7% of the year\'s plan. The deficit comprised a sizable 23.5% of the total sum of public expense for the year. The fact that the state budget has been built rather poorly in 2010 is not news to the market; we earlier wrote that the government will perhaps overshoot the target of public borrowing in 2010.