OREANDA-NEWS. March 25, 2010. On 24 March 2010, the Cabinet of Minister of Ukraine approved the macroeconomic forecasts for 2010. In particular, the government expects real GDP growth and consumer inflation at 3.7% and 13.1%, y/y, respectively, in 2010. At the same time, the average natural gas price is forecast at USD 334 per tcm, and the UAH/USD average exchange rate is expected at the level of 8:1. The minimum wage growth was brought down from 24% to 19% (to UAH 888) in 2010. Such an economic performance is to result in a 5% Budget Deficit in real GDP in 2010.

Millennium Capital sees the government macro forecasts to be quite realistic, except for the Budget deficit forecast (UAH 54bn) in 2010. Millennium Capital considers that accounting for the expected Pension Fund deficit, which is estimated at UAH 30bn, and the forthcoming natural gas payments (USD 9bn), the Budget Deficit may go up to UAH 80bn. Millennium Capital expects that in order to fulfill the forecast Budget Deficit, the government will have to increase its Public Debt by at least 10% or UAH 30bn in 2010.