Albania’s general budget deficit narrows 82.3% y/y in Jan-Feb 2014.

By bne IntelliNews March 21, 2014

Albania’s general budget deficit narrowed by 82.3% y/y to ALL 1.7bn (EUR 11.9mn) in January to February 2014, data from the finance ministry showed. The improvement was supported by a 4.9% y/y increase in budget revenues coupled with a 9% y/y drop in expenditures. In our calculations, the deficit accounted for 0.1% of the projected full-year GDP, down from 0.7% in the same period a year earlier.

The increase in budget revenues was exclusively on account of a 5% y/y rise in tax receipts. Within this group, revenues from VAT increased by 17.5% y/y to ALL 18.3bn, with VAT on domestic consumption up by 47.9% y/y and VAT, collected by the customs, rising by 8.1% y/y. Growth in VAT revenues was sufficient to offset falling revenues from excise (down by 21.6% y/y) and personal income tax (down by 7.3% y/y). Revenues from corporate income tax stagnated in the period.

Total social contributions picked up 1.2% y/y in Jan-Feb period.

On the expenditure side, capital expenditure declined by 71.9% y/y to ALL 2.6bn. On the other hand, current expenditure advanced by 2.7% y/y to ALL 51.4bn, pushed up by higher social insurance outlays (up by 10.2% y/y)

Last year Albania’s general budget deficit widened by 42.7% y/y to ALL 65.4bn, as revenue fell, while expenditures increased. In our calculations, the deficit accounted for 4.9% of the projected full-year GDP, up from 3.5% a year earlier.

We note that the government expects the budget deficit to widen to 6.5% of the GDP in 2014.

General Budget, Jan-Feb, ALL bn    
   2013 2014 % y/y
Total revenues  49.9 52.4 4.9
   VAT  15.6 18.3 17.5
   Corporate profit  2.4 2.4 0.3
   Excise  4.7 3.7 -21.6
   Personal income  4.9 4.6 -7.3
   National  4.1 4.8 16.2
   Customs duties  0.7 0.8 6.0
Total social contributions  10.4 10.5 1.2
   Social insurance  9.4 9.2 -1.8
   Health insurance  0.7 1.3 87.6
 Non-tax Revenues  4.8 4.4 -7.6
Total expenditures of which: 59.4 54.1 -9.0
   Current 50.1 51.4 2.7
   Capital  9.3 2.6 -71.9
Balance -9.5 -1.7 -82.3
Balance (% of GDP forecast) -0.7 -0.1  
Source: Ministry of finance       

Related Articles

Albania wants to attract more US defence sector investments

Albanian Defense Minister Olta Xhacka said that Tirana wants more investments by the US military industry in Albania, after a US company launched work on the installation of the Integrated ... more

Bulgaria’s Borissov appeals to Western Balkan leaders to preserve peace

Boyko Borissov, prime minister of the current EU Council chair Bulgaria, called on April 10 on the leaders of the Western Balkan countries to preserve peace and ... more

Albania's second airport to open in autumn 2018

The idled airport in the northern Albanian city of Kukes is expected to start operations by this autumn, Prime Minister Edi Rama said on April 6.  Albania’s air transport sector is on the ... more