Albania’s general budget gap more than doubles y/y in Jan-Oct 2013

By bne IntelliNews November 26, 2013

Albania’s general budget deficit surged by 111.7% y/y to ALL 54.5bn (EUR 388.6mn) in January to October 2013 as revenue fell, while expenditures increased, finance ministry data showed. In our calculations, the deficit accounted for 3.8% of the projected full-year GDP, up from 1.9% a year earlier.

Total budget revenues declined by 2.7% y/y to ALL 265.8bn, which was exclusively due to shrinking tax revenues (down 5% y/y). Within this, the combined revenue from indirect taxes fell by 6.7% y/y as VAT revenues decreased by 7.6% y/y with VAT on domestic consumption down 8.7% y/y and VAT, collected by the customs, dropping 7.3% y/y.

Moreover, revenues from customs duties and excise fell by 9.4% y/y and 3.5% 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 6.3% y/y in January to September 2013.

On the expenditure side, total budget spending increased by 7.1% y/y supported by a 5.7% y/y rise in current expenditure and a 20% y/y increase in capital expenditure. In our view, higher spending on public investments could be partly explained with the pre-election expenditures as Albania held parliamentary elections on June 23.

General Budget, Jan-Oct, ALL bn    
   2012 2013 % y/y
Total revenues  273.2 265.8 -2.7
   VAT  97.1 89.7 -7.6
   Corporate profit  13.9 12.5 -10.0
   Excise  30.7 29.6 -3.5
   Personal income  22.6 24.0 6.3
   National  23.9 23.1 -3.3
   Customs duties  5.0 4.5 -9.4
Total social contributions  48.3 50.3 4.2
   Social insurance  41.2 42.5 3.2
   Health insurance  6.0 6.2 3.8
 Non-tax Revenues  19.6 19.0 -3.1
Total expenditures of which: 299.0 320.3 7.1
   Current 252.2 266.7 5.7
   Capital  44.7 53.6 19.9
Balance -25.7 -54.5 111.7
Balance (% of GDP forecast) -1.9 -3.8  
Source: Ministry of finance       

Related Articles

Wiretapped conversations link Albania’s ex-interior minister to drug traffickers

Former Albanian interior minister Saimir Tahiri has been accused of links with drug traffickers after his name was mentioned in a series of wiretapped recordings revealed by Italian media on October ... more

New parliamentary dress code to rein in Albania’s sneaker loving PM

Albanian Prime Minister Edi Rama will have to change his sartorial ways when he attends parliament sessions under a new code of conduct for MPs drawn up by the governing Socialist Party.  The ... more

Albania a "centre of organised crime" says US ambassador

The US ambassador in Albania Donald Lu has urged the authorities in Tirana to fight against organised crime, which he said was the biggest and most difficult challenge ahead for the country. ... more