Albania’s general budget deficit expanded by 129.2% y/y to ALL 54.4bn (EUR 385.7mn) in January to August 2013 as revenue fell while expenditure increased, finance ministry data showed. In our calculations, the deficit accounted for 3.8% of the projected full-year GDP, up from 1.8% a year earlier.
Total budget revenues declined by 3.8% y/y to ALL 210.6bn, which was exclusively due to tax revenues that dropped by 4.3% y/y. Within this, the combined revenue from indirect taxes fell by 7.4% y/y, as VAT revenues decreased by 8.2% y/y with VAT on domestic consumption down by 11.3% y/y and VAT, collected by the customs, dropping by 7.3% y/y
Moreover, revenues from customs duties and excise fell by 10.3% y/y and 4.6% y/y, respectively. Lower revenues from indirect taxes signal for a continued stagnation of the domestic consumption. By contrast, revenues from personal income tax advanced by 8.4% y/y in the first eight months of 2013.
On the expenditure side, total budget spending increased by 9.2% y/y supported by a 6.1% y/y rise in current expenditure and a 33.1% y/y increase in capital expenditure. In our view, higher spending on public investments could be partly explained with pre-election expenditures as Albania held parliamentary elections on June 23.
|General Budget, Jan-Aug, ALL bn|
|Total social contributions||38.5||39.8||3.3|
|Total expenditures of which:||242.6||264.9||9.2|
|Balance (% of GDP forecast)||-1.8||-3.8|
|Source: Ministry of finance|
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