Macedonia's budget deficit reaches 3.3% of GDP at end-September

By bne IntelliNews October 28, 2014

Macedonia's central government budget deficit widened to MKD 17.5bn (EUR 283.4mn) in January-September from MKD 15.8bn in the same period of 2013, finance ministry data showed. We estimate that the nine-month gap is equivalent to 3.3% of the projected 2014 GDP. We use the ministry’s latest (as of October) 2014 nominal GDP forecast, which predicts real growth of 3.5% and a GDP deflator of 1.6%. The nine-month deficit reached 89% of the new full-year target of MKD 19.6bn (3.7% of GDP).

Total budget revenues increased by a real 1.7% y/y to MKD 104.6bn in January-September, and total budget expenditures rose by a real 3% y/y to MKD 122bn.

In September alone, the budget deficit narrowed by 52.4% y/y to MKD 476mn. Total revenues increased by a real 15.2% y/y to MKD 12.7bn, and total expenditures grew by a real 9.5% y/y to MKD 13.2bn.

The biggest contribution to revenue growth came from taxes, which expanded by a real 18.5% y/y to MKD 7.1bn in September. Positive annual growth was reported for VAT (+27.4% to MKD 3.6bn), personal income tax (+31.9% to MKD 1.1bn) and excises (+10.8% to MKD 1.7bn). Revenues dropped y/y in real terms for profit tax (-6.6% to MKD 240mn), import duties (-3% to MKD 339mn) and other taxes (-48.9% to MKD 74mn).

Central govt budget, MKD mn          
  Budget 2014 Sep'14 % y/y real Jan-Sep'14 % y/y real
TOTAL REVENUES, incl.: 155,554 12,742 15.2% 104,564 1.7%
Taxes 85,189 7,070 18.5% 59,848 5.8%
Contributions 44,703 3,702 7.5% 32,154 4.6%
TOTAL EXPENDITURES 175,157 13,218 9.5% 122,018 3.0%
Current Expenditures 154,073 12,044 12.5% 110,424 3.6%
Capital Expenditures 21,084 1,174 -14.1% 11,594 -3.0%
BUDGET BALANCE -19,603 -476 -52.8% -17,454 10.9%
Source: Ministry of finance          
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