## Ukraine: Technical Assistance Report-Strengthening Budget Formulation and Fiscal Risk Management

_IMF Staff Country Reports, December 6, 2019_

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**Canonical URL:** [Ukraine: Technical Assistance Report-Strengthening Budget Formulation and Fiscal Risk Management](https://www.imf.org/en/publications/cr/issues/2019/12/06/ukraine-technical-assistance-report-strengthening-budget-formulation-and-fiscal-risk-48857)

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## Bibliographic details
- Published: December 6, 2019
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513521695.002

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### Core findings on MTBF and PFM reform
- Implementing strategic planning and a medium-term budget framework (MTBF) is a core component of Ukraine’s Public Financial Management (PFM) reform strategy.
- A pilot MTBF conducted in 2017 formed the basis for amendments to the Budget Code in December 2018, which firmly establish a MTBF as the basis for budget preparation.
- The December 2018 amendments establish a legal basis for related reforms, including regular spending reviews and monitoring and managing risks to public finances.

### Fiscal risk management and the central margin
- The report highlights that a central margin should be established to:
  - accommodate budget volatility, and
  - meet the costs of genuinely urgent, unavoidable and unforeseeable expenditure pressures that may arise.
- To reinforce spending discipline, the margin should be:
  - tightly controlled,
  - centrally managed, and
  - transparently reported.

### Strategic planning and integrated policymaking
- Strategic planning should be improved to provide a stronger basis for integrated policymaking, strategizing, planning and budgeting.
- Creating a robust strategic planning system would assist in aligning strategy, planning and the MTBF for better budget formulation.

### Policy recommendations (summarized)
- Institutionalize the MTBF as the basis for budget preparation in line with the December 2018 Budget Code amendments.
- Conduct regular spending reviews supported by the legal framework established in the amendments.
- Establish and centrally manage a tightly controlled and transparently reported central margin to handle budget volatility and urgent/unforeseeable expenditures.
- Strengthen strategic planning systems to support integrated policymaking and to underpin medium-term budgeting.

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_Source: https://www.imf.org/en/publications/cr/issues/2019/12/06/ukraine-technical-assistance-report-strengthening-budget-formulation-and-fiscal-risk-48857_