Albania’s general budget deficit surges 129.2% y/y in Jan-Aug 2013.

By bne IntelliNews September 23, 2013

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    
   2012 2013 % y/y
Total revenues  218.9 210.6 -3.8
   VAT  76.4 70.1 -8.2
   Corporate profit  11.6 10.3 -11.7
   Excise  24.6 23.5 -4.6
   Personal income  17.9 19.4 8.4
   National  19.3 18.1 -6.4
   Customs duties  4.0 3.6 -10.3
Total social contributions  38.5 39.8 3.3
   Social insurance  32.8 33.6 2.4
   Health insurance  4.8 4.9 1.2
 Non-tax Revenues  16.3 16.1 -1.1
Total expenditures of which: 242.6 264.9 9.2
   Current 204.6 217.0 6.1
   Capital  36.0 47.9 33.1
Balance -23.7 -54.4 129.2
Balance (% of GDP forecast) -1.8 -3.8  
Source: Ministry of finance       
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