The state budget deficit in 2023 will be more than 26% of GDP — NBU
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The National Bank predicts an expansion of the budget deficit by the end of the year to 26% of GDP with a gradual narrowing in the future. This is stated in the “Inflation Report” of the NBU for April 2023.
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“Taking into account the significant costs of ensuring defense capability and the limited resource base due to the consequences of the war, the budget deficit will expand to more than 26% of GDP in 2023. In the future, a gradual narrowing of the budget deficit is expected,” the regulator noted.
At the same time, the fiscal policy will remain stimulating over the entire forecast horizon, which, in particular, is important for supporting the post-war recovery of the economy.
Read also: The National Bank significantly improved forecasts of GDP growth and inflation
The main source of financing
International financial aid is expected to be the main source of financing the significant budget deficit this year.
At the same time, the role of borrowers in the domestic debt market will grow, including due to the increase in the attractiveness of government securities against the background of a decrease in the risk premium and inflation.
The National Bank also notes that the debt burden in the coming years will be relatively moderate due to favorable conditions for attracting new loans.
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Source: Ministry of Finance
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