OREANDA-NEWS. October 06, 2010. Draft State Budget for 2011 provides reduction in the real budget deficit to 3.4 percent. The Prime Minister of Ukraine Mykola Azarov said this during a meeting with IMF head Dominique Strauss-Kahn.

Mykola Azarov noted that the draft budget for next year is based on the new Tax Code. "We now have calculated the budget for next year. We are building a project in a significant reduction of the real budget deficit, about 3.4 percent of GDP" - the head of Government said and added that the Cabinet will significantly reduce the internal and external borrowings.

The Prime Minister predicted that the Tax Code would be adopted by the Parliament in November.

The IMF Head said he was satisfied with the level of cooperation between Ukraine and the IMF. "We want to collaborate on the fact that all the decisions you make for next year, has successfully provided a program of cooperation between Ukraine and the IMF. And in this context it is required that the draft budget for 2011 corresponded to the program of cooperation. In particular, we should ensure the budget deficit at 3.5 percent of GDP"- he said. Dominique Strauss-Kahn added that the Government along with the IMF needs to work on rationalization of budget expenditure items.

The Prime Minister noted that Government is now working to reduce the administrative costs and the ratio of external debt of Ukraine to the level of GDP. "We are now reducing the administrative costs, we plan to reduce it significantly next year. We are able to keep its fiscal deficit to 3.5 percent to be able to keep our debt ratio to GDP at 43-44 percent" - Mykola Azarov said.

The Head of Government stressed that the economic situation in the country is under the absolute control of the Cabinet. In particular, the Government in its Budget projects for 2011 counted the worst options for the situation on world financial markets, and optimal development. "The economic situation is under absolute control of the Government, and we expect the worst scenario situation on global financial markets, and best ones. We can handle any scenario. Especially if we work with you"- he said.

According to Dominique Strauss-Kahn, the IMF gives positive evaluation of the level of cooperation between Ukraine in all branches of the power, particularly between the President and the Government. "I would like to note the major changes that I see now compared with how the previous government worked. I am pleased to hear that you and the President discuss, make predictions, and I'm sure you really will tackle with those tasks that are put in front of you"- the head of the IMF concluded.