Albania’s general budget gap widens 71.5% y/y in Jan-Nov 2013.

By bne IntelliNews January 10, 2014

Albania’s general budget deficit widened by 71.5% y/y to ALL 60.5bn (EUR 430mn) in January to November 2013 as revenue fell, while expenditures increased, finance ministry data showed. In our calculations, the deficit accounted for 4.5% of the projected full-year GDP, up from 2.7% a year earlier.

Total budget revenues declined by 3.1% y/y to ALL 292.2bn, which was exclusively due to shrinking tax revenues (down 4.5% y/y). Within this, the combined revenue from indirect taxes fell by 5.7% y/y as VAT revenues decreased by 7.3% y/y with VAT on domestic consumption down 6.3% y/y and VAT, collected by the customs, dropping 7.5% y/y.

Moreover, revenues from customs duties fell by 8.6% y/y, while excise only receipts remained flat y/y. Lower revenues from indirect taxes signal for a continued stagnation of the domestic consumption. By contrast, revenues from personal income tax advanced by 4.1% y/y in January to November 2013.

On the expenditure side, total budget spending increased by 4.7% y/y supported by a 4.9% y/y rise in current expenditure and a 7.5% 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 projected the budget deficit to widen to 6.6% of the GDP in 2014.

General Budget, Jan-Nov, ALL bn    
   2012 2013 % y/y
Total revenues  301.6 292.2 -3.1
   VAT  107.1 99.3 -7.3
   Corporate profit  15.2 13.6 -10.7
   Excise  33.1 33.2 0.1
   Personal income  25.0 26.0 4.1
   National  26.2 25.5 -2.5
   Customs duties  5.5 5.1 -8.6
Total social contributions  52.7 54.9 4.2
   Social insurance  45.2 46.7 3.3
   Health insurance  6.4 6.7 5.1
 Non-tax Revenues  21.8 20.2 -7.2
Total expenditures of which: 336.8 352.7 4.7
   Current 281.7 295.6 4.9
   Capital  53.1 57.1 7.5
Balance -35.3 -60.5 71.5
Balance (% of GDP forecast) -2.7 -4.5  
Source: Ministry of finance       

Related Articles

Albanian stock exchange expected to launch in autumn 2017

Albania’s first private stock exchange is expected to be operational soon, most probably this autumn, after it was licensed by the financial supervisory authority, AMF, earlier in July. The ... more

Albanian opposition Democrats re-elect party leader despite disastrous election defeat

Albania’s opposition Democratic Party (DP) re-elected Lulzim Basha as party leader for another four-year mandate on July 22, despite the catastrophic general election defeat in June. Basha, 43, ... more

Albanian PM says new government to get rid of “parasites” in administration

Dismissing "parasites" in the public administration will be the priority of the Socialist-led government during its second mandate, Albanian Prime Minister Edi Rama has said, ... more

Dismiss