KIEV, June 10 – Ukraine’s economy, hit by the global financial crisis, may have contracted 25% on the year in the first quarter, worse then had been earlier expected, President Viktor Yushchenko said Wednesday.

Two weeks ago Yushchenko estimated the economy may have contracted between 20% and 23% on the year in the first quarter, but on Wednesday he said the actual contraction was probably worse.

“Experts believe that the contraction was between 23% and 25% in the first quarter,” Yushchenko said.

Companies watch for clues any gauge of the depth of Ukraine’s economic downturn by the authorities after Prime Minister Yulia Tymoshenko earlier this year ordered most economic statistics classified.

The order was apparently politically motivated to shield Tymoshenko from criticism for slow reaction to the economic crisis and the failure to approve an anti-crisis measures, analysts said.

Tymoshenko has been refusing to revise the government’s earlier forecast the economy would grow 0.4% on the year in 2009, and also refused to amend the budget to reflect the economic contraction. She also insisted that budget has been collecting revenue in line with forecast this year.

But Yushchenko - Tymoshenko’s political rival at the upcoming presidential election - said the government has been manipulating with figures to make an impression the budget revenue is high.

“Every month there is a manipulation with the state budget,” Yushchenko said. “Up to 30% or 40% of [monthly] revenue is delivered on the last day of each month.”

That is done through money printing or forcing Naftogaz Ukrayiny and other state companies to pay taxes ahead of schedule, or through other tricks involving the State Customs Service, he said.

The government forced state companies to pay taxes – 12 billion hryvnias - three months ahead of schedule, while another 13.5 billion hryvnias was accumulated through postponing payments of value added tax rebates to exporters, according to Yushchenko.

“We had never had such a [big debt] figure since the country’s independence 17 years ago,” Yushchenko said.

The Tymoshenko government has taken unprecedented steps this year to conceal the state of economy by refusing to disclose vital economic statistics. The government - at Tymoshenko’s personal pressure - approved two special orders over the past 60 days effectively banning the release of economic statistics.

The release of bad economic data may hurt her politically ahead of the presidential election due in January 2010. (tl/ez)