Montenegro’s budget deficit shrank 19.9% y/y to EUR 122mn in January-November 2013, as stronger revenue growth offset a milder increase in expenditures, data from the finance ministry showed. The 11-month budget deficit equalled to 3.5% of the full-year GDP projection, down from 4.6% of GDP a year ago, according to IntelliNews calculations.
Total budget revenue grew 9.9% y/y to EUR 1.1bn in January-November thanks to higher tax collection. VAT revenue climbed 18.3% y/y to EUR 389mn due to the VAT rate hike from 17% to 19% in July. Social contributions, likewise, increased by 8.2% y/y to EUR 338mn.
The 11-month budget expenditures rose by 6% y/y to EUR 1.2bn, lifted by higher current expenses and additional spending related to the bankrupt aluminium smelter KAP. Current expenditures increased by 7.3% y/y to EUR 1.17bn in January-November due to rising interest and public sector transfers. Capital expenditures remained in the red, shrinking 19.8% y/y to EUR 44.4mn in January-November.
The January-November budget gap was by 10% higher than the plan for the period, already exceeding the full-year target of EUR 95mn (2.7% of GDP) due to the payment in August of EUR 103mn of state guarantees on KAP's loans. In response, the government has said the full-year gap might reach EUR 151.9mn, or 4.6% of the GDP.
In 2014 Montenegro hopes to lower its budget deficit to EUR 71mn (1.99% of the full –year GDP forecast) thanks to improved economic activity and higher tax revenue. The economy is projected to grow by 3.6% this year, up from anticipated 2.6% in 2013.
|Montenegro budget, EUR mn||Jan-Nov'12||Jan-Nov'13||y/y,%||deviation from the plan, %|
|--Personnal income tax||71.5||80.1||12.0||1.2|
|--Goods and services||129.2||72.3||-44.0||-2.3|
|--Salaries and wages||343.4||337.6||-1.7||-1.0|
|--Social security transfers||439.2||441.2||0.5||/|
|--transfers to institutions, individuals, NGOs and public sector||25.3||76.5||202.4||/|
|Repayment of guarantees||24.0||106.7||344.9||/|
|Source: Finance ministry|
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