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UPDATE 1-Ukraine agrees draft budget for 2010

Published 04/23/2010, 07:35 AM
Updated 04/23/2010, 07:40 AM
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* Approval of budget could be key to $12 billion IMF credit

* Government wants to get budget through parliament next week

(Adds background)

KIEV, April 23 (Reuters) - The Ukrainian government on Friday agreed a 2010 draft budget, which could unlock $12 billion worth of credit from the International Monetary Fund, and was sending it to parliament for approval.

"After some minor clarifications and additions, the law on the 2010 budget will now be passed to parliament," Prime Minister Mykola Azarov said, according to a statement issued by the cabinet of ministers.

The Ukrainian government hopes that a budget which commits it to tighter social spending will trigger a new $12 billion credit programme from the IMF to replace a previous package suspended late last year.

The government had been waiting for a new lower price for natural gas supplies from Russia to nail down the details of key figures in the budget.

This came on Wednesday when Russia agreed a 30 per cent discount on the price in exchange for a 25-year extension to the lease of its naval base in Ukraine's Crimea.

No precise figures were given in the government statement, but the government has said it was aiming for a budget deficit of 6 percent of gross domestic product.

Azarov, in comments to the cabinet, said the government wanted parliament, which will consider the budget next week, to pass a law setting a limit on state pension payments and imposing a tax on personal luxury cars, yachts, helicopters and private planes.

(Reporting by Natalya Zinets; Writing by Richard Balmforth)

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