KIEV -- Ukraine plans a budget deficit of 4 to 5 percent of gross domestic product in 1995, if it can win international financing to help close the gap, a presidential adviser said Wednesday.


"We have a preliminary draft envisaging a budget deficit between 4 and 5 percent," Anatoly Halchynsky said. "Ukraine is counting on two new elements to reach this goal -- foreign credits and short-term state bonds."


He said a presidential decree and other measures were being prepared on issuing the securities, but gave no details.


"This won't solve all our problems with the budget, but it will help," he said. "Russia has already issued such securities 17 times."


He said government ministers would review the draft budget early next week before forwarding it to parliament.


Ukrainian officials have said the government must agree to a budget before the International Monetary Fund will give it a $1.5 billion stand-by loan.


Last year Ukraine obtained a $500 million loan from the World Bank and a $371 million loan from the IMF.


"We think our budget will be realistic, compared to recent attempts," Halchynsky said.


Last year Ukraine approved a balanced budget, but had to struggle to halve a 20 percent deficit to qualify for the IMF loan. In 1993, a planned 2 percent deficit ballooned to 17 percent of GDP, Halchynsky said.


Huge energy debts, declining industrial output, high inflation and massive credits to the farm sector all contributed to a big deficit in 1994.


Halchynsky said Ukraine planned to revamp the financing system for the farm sector and privatize large swathes of the agricultural industry, including grain elevators.


"We will limit our state order system to a very small sector, and the rest will be free trade. We are preparing measures to create a network of agricultural stock exchanges, which will also trade in futures," he said.