Albania’s general budget gap widens 42.7% y/y in 2013.

By bne IntelliNews February 17, 2014

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      
   2012 2013 % y/y
Total revenues  330.4 328.6 -0.5
   VAT  116.5 112.9 -3.1
   Corporate profit  16.9 15.1 -10.3
   Excise  36.4 38.6 6.1
   Personal income  28.0 29.6 5.6
   National  28.7 28.6 -0.4
   Customs duties  6.1 5.8 -5.9
Total social contributions  57.4 60.0 4.6
   Social insurance  49.5 51.1 3.1
   Health insurance  6.6 7.4 12.4
 Non-tax Revenues  24.0 21.6 -10.1
Total expenditures of which: 376.2 394.1 4.7
   Current 312.6 328.6 5.1
   Capital  61.7 65.4 6.1
Balance -45.9 -65.4 42.7
Balance (% of GDP forecast) -3.5 -4.8  
Source: Ministry of finance       

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