Fitch: Ukraine needs to ensure budget deficit at 2.5% of GDP in 2012.

By bne IntelliNews October 31, 2011
Ukraine needs to raise gas prices in order to guarantee budget deficit of 2.5% in 2012, Charles Seville, associate director in Fitch Ratings' Sovereign group, said. According to him, budget deficit is forecasted at 3.5% in 2011, and it will be quite difficult to reach a deficit of 2.5% due to Naftohaz deficit of about 1%, thus it is necessary to raise gas prices to hit this target. Moreover, Seville pointed out that the Eurobond market is still closed for Ukraine. There is a shortage of finance in Ukraine, the expert said adding, the FinMin underfulfilled the indicators plan and thus the Eurobond market is closed for Ukraine now. He also believes that Ukraine should continue cooperation with the International Monetary Fund, in order to reduce the risks associated with repetition of the financial and economic crisis.
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