Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Ukraine Passes Long-Delayed 1997 Budget

KIEV -- Ukraine's parliament passed the much-delayed 1997 budget by 229 votes to 71 on Friday, approving a deficit of 5.7 percent of gross domestic product or 4.0 percent by International Monetary Fund standards.

Deputies set revenues at 22.4 billion hryvnias ($12.1 billion) and expenditure at 28.12 billion hryvnias in line with IMF demands. There were 11 abstentions and 27 "no" votes.

The fund is waiting for Ukraine to meet 41 conditions to give it a $2.5 billion to $3 billion, three-year Extended Fund Facility to succeed an $867 million stand-by loan which expired in February.

But the IMF said Friday that the fund was considering a temporary stand-by agreement to tide Ukraine over until it fulfilled all conditions.

"The budget is a good step, but it's not sufficient for the EFF," Senior Resident Representative Patrick Lenain said, adding that Ukraine would still have to cut payroll taxes from 52 percent to 40 percent as a first step.

An estimated 60 percent of the economy goes undeclared and the IMF wants Ukraine to legalize it by cutting punitive taxes.

The Ukrainian side said recently it had met 27 of the conditions, but that the budget was key.

Inflation has been forecast in budget papers at 25 percent, but recently officials have said it will be about 17 percent.

This year, the former Soviet republic expects to post its first growth since independence of 0.3 percent. The economy contracted by 10 percent last year.

Ukraine has never passed a budget by Jan. 1 since it won independence from Moscow in 1991, but this year's was a record delay.

For the first time, deputies banned covering the deficit with central bank credits, cancelling an earlier vote on the last day of budget debates.

They also placed no limits on revenues from foreign credits, expected to cover 2.4 billion hryvnias of the deficit, but deputies will have to approve each loan.