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UPDATE 1-Ukraine parliament fails to pass 2009 budget

Published 12/25/2008, 12:39 PM
Updated 12/25/2008, 12:40 PM
TGT
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(Adds details)

KIEV, Dec 25 (Reuters) - Ukraine's parliament failed on Thursday to pass the 2009 budget, with a deficit of 3 percent of gross domestic product, after several deputies in the shaky ruling coalition opposed the draft.

The budget sees revenues of 237.5 ($30.5 billion) billion hryvnias and spending of 268.5 billion hryvnias and is based on an economic growth forecast of 0.4 percent and inflation target of 9.5 percent -- which analysts have called optimistic.

Ukraine has begun to suffer more than most from the global financial crisis -- its economy made a sharp turnaround in the past two months with GDP falling 14.4 percent in November year-on-year. Analysts see a recession next year of 3 percent to 5 percent.

"The economic forecasts are not realistic -- including GDP growth and the level of inflation," Our Ukraine deputy Ivan Zayats said during the debate.

"Increasing the tax burden on goods producers, instead of lowering it, puts into question the possibility of getting out of the crisis," he said.

The budget motion fell short seven votes of the 226 needed, with over a dozen deputies from the pro-presidential Our Ukraine party failing to vote for the draft.

President Viktor Yushchenko and Prime Minister Yulia Tymoshenko, whose parties constitute the coalition with another faction, have been at odds for months.

The coalition collapsed in September and Yushchenko called for a snap parliamentary poll, but he had to cancel that decree as the economic crisis took hold of Ukraine.

Their parties patched up their differences and reformed the coalition earlier this year together with a smaller party led by the parliament's chairman, Volodymyr Lytvyn.

Parliament is back in session on Friday, though Lytvyn did not specify which topics would be debated. (Editing by Walker Simon)

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