Macedonia's central government budget deficit narrowed by 48.2% y/y to MKD6.3bn (€102.3mn) in January-April, finance ministry data showed. We estimate that the four-month gap is equal to 1.1% of the projected 2015 GDP, the same as at end-March, as the budget was virtually balanced in April. The full-year deficit target is MKD18.5bn or 3.3% of GDP.
Total budget revenues increased by a real 15.3% y/y to MKD52.2bn in January-April, whereas total expenditure rose by a real 1.8% y/y to MKD58.5bn.
In April alone, the budget posted a small surplus of MKD8mn, reversing a deficit of MKD1.2bn in April 2014. Revenues went up by a real 8.8% y/y to MKD14.4bn, while expenditure edged down 0.1% y/y to MKD14.4bn. The biggest contribution to revenue growth came from profit tax, which jumped 2.6 times y/y to MKD2.2bn. Tax revenues hence climbed 17% y/y to MKD8.7bn, with personal income tax up 11.6% to MKD1.1bn and excises up 4.2% to MKD1.4bn. On the other hand, VAT fell 6% to MKD3.5bn, other taxes dropped 25.1% to MKD60mn, and import duties declined 2.2% to MKD376mn.
In assessing the importance of fiscal policy in Macedonia, one should keep in mind that the country implements a fixed exchange rate regime.
| Central govt budget, MKDmn | |||||
| Budget 2015 | Apr'15 | % y/y real | Jan-Apr'15 | % y/y real | |
| TOTAL REVENUES, incl.: | 163,280 | 14,383 | 8.8% | 52,162 | 15.3% |
| Taxes | 87,465 | 8,660 | 17.0% | 30,595 | 20.1% |
| Contributions | 48,717 | 4,232 | 12.8% | 15,164 | 9.3% |
| TOTAL EXPENDITURE | 181,777 | 14,375 | -0.1% | 58,455 | 1.8% |
| Current Expenditure | 160,569 | 13,102 | 3.2% | 53,038 | 3.0% |
| Capital Expenditure | 21,208 | 1,273 | -24.8% | 5,417 | -9.1% |
| BUDGET BALANCE | -18,497 | 8 | - | -6,293 | -48.2% |
| Source: Ministry of finance |
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