This primarily concerns the recapitalization of state companies in sectors such as energy, banking, and construction.
According to the EFSR forecast, the average budget surplus is expected to be 1.3% of GDP in 2026-2028, against the backdrop of high non-tax revenues and a gradual decline in tax revenues.
Analysts attribute this decline to reduced revenues from foreign economic activities, including VAT on imports, customs duties, and income from gold mining companies.
“Nevertheless, the budget deficit, adjusted for 'below the line' expenditures, will average 3.6% of GDP in 2026-2028, which is a decrease compared to the expected peak of 9.6% of GDP in 2025,” the authors of the forecast note.
“The main ways to finance the deficit will be attracting domestic and external debt, as well as using government deposits,” they add.
Note:
Financing "below the line" expenditures includes accounting for and financing one-time, atypical, or extraordinary revenues and expenses that are not related to the core activities of the state or company. These expenses are reflected in the reporting after the main operational activities to show true profitability.
