Albania’s general budget deficit widened by 42.7% y/y to ALL 65.4bn (EUR 466mn) in 2013 as revenue fell, while expenditures increased, finance ministry data showed. In our calculations, the deficit accounted for 4.8% of the projected full-year GDP, up from 3.5% a year earlier.
Total budget revenues declined by 0.5% y/y to ALL 328.6bn. Tax revenues edged up by 0.2% y/y to ALL 301.4bn, but this was unable to offset a 10.1% y/y drop in non-tax revenues.
The combined revenue from indirect taxes fell by 1.1% y/y as VAT revenues decreased by 3.1% y/y with VAT on domestic consumption down 3.3% y/y and VAT, collected by the customs, dropping 5.9% y/y. Moreover, revenues from customs duties fell by 5.9% y/y. By contrast, excise receipts increased by 6.1% y/y.
Revenues from personal income tax advanced by 5.6% y/y in 2013.
On the expenditure side, total budget spending increased by 4.7% y/y supported by a 5.1% y/y rise in current expenditure and a 6.1% 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.
We note that the government projects the budget deficit to widen to 6.5% of the GDP in 2014.
|General Budget, 2013, ALL bn|
|Total social contributions||57.4||60.0||4.6|
|Total expenditures of which:||376.2||394.1||4.7|
|Balance (% of GDP forecast)||-3.5||-4.8|
|Source: Ministry of finance|
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