The Cabinet of Ministers has drafted the state budget for 2007 on the basis of a projected 6.5% GDP growth rate and a projected 7.5% inflation rate, First Deputy Prime Minister and Finance Minister Mykola Azarov told journalists after a meeting of the Cabinet of Ministers.

According to him, state budget revenues are projected to increase by 15% while the hryvnia's exchange rate to the dollar is projected at 5.1 hryvnia per dollar.

Azarov said that the proportion of the GDP that would be "distributed through the budget" would make 29.9%.

According to him, the novelty in the draft state budget for 2007 is that revenues from privatization of state assets will be spent on concrete investment projects and not "eaten up."

Moreover, Azarov said that the draft state budget for 2007 would also provide for a deficit equal to 2.6% of GDP and that this deficit would be covered through borrowings on the domestic and foreign markets.

According to him, the government expects the revenue target of the draft state budget to be exceeded.

He told journalists that the consolidated budget was projected at 170 billion hryvnia (US$ 34 billion) and the "general fund" of the state budget at 110 billion hryvnia (US$ 22 billion).


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