Finance Minister Oleksandr Danylyuk says that the share of budget expenditures on payments of housing and utility subsidies is growing rapidly and may reach 3.8% of the country`s GDP by 2017.
”Provision of subsidies for half of Ukraine`s population creates a huge burden on the state budget, which can reach 3.8% of GDP in 2017,” he said in a report posted on the website of the National Reform Council.
It is noted that experts at Berlin Economics and McKinsey have estimated that budget expenditures on housing and utility subsidies for the Ukrainian population in 2017 may grow to UAH 80 billion, from UAH 35 billion in 2016.
The ministry notes that main causes of significant budget spending on subsidies are inefficient consumption, which is three times higher than in EU countries, and low incomes of the population.
”The current system of subsidies does not provide enough incentives for subsidy recipients to get involved in energy efficiency measures,” the document said.
As UNIAN reported earlier, President of Ukraine Petro Poroshenko has previously underlined the importance of energy efficiency programs and the use of different energy sources. According to the president, the estimated savings for the country in the five-year outlook are significant provided the country effectively develops its gas production potential and promotes the efficient use of resources. Ukraine could save up to 1.5 billion cubic meters of gas annually, reduce subsidy expenditures to UAH 3-5 billion per year, create up to 50,000 new jobs and boost tax revenue to UAH 5 billion per year.
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