Kyiv government approves 2022 draft budget with 3.5% deficit

KYIV, Sept 15 (Reuters) - The Ukrainian government has approved a draft budget for 2022 with a deficit of 3.5% of gross domestic product, down from 5.5% in 2021, Prime Minister Denys Shmygal said during a televised government meeting on Wednesday.

The draft is based on a forecast of 3.8% economic growth next year compared to about 4% expected in 2021. Inflation is expected to slow to 6.2% in 2022 from about 10% this year.

Shmygal said that the document would be submitted to parliament for approval.

The finance ministry said in a separate statement that Ukraine was planning to finance part of next year's budget deficit by issuing $1.5 billion in Eurobonds.

It also expects to receive a combined $2.9 billion from the International Monetary Fund and other international financial organisations.

Ukraine signed a $5 billion IMF programme last year but the loans were effectively frozen over concerns about reforms.

Shmygal said on Tuesday that Kyiv had fulfilled all the IMF's conditions under the current assistance programme and expected to receive the next tranche, worth $750 million, in December.
Reporting by Natalia Zinets and Pavel Polityuk; Editing by Kevin Liffey

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