Montenegro's 2012 budget deficit widens 3.1% to EUR 196mn.

By bne IntelliNews June 14, 2013

Montenegro’s budget gap expanded 3.1% to EUR 195.6mn in 2012 due to falling budget revenue and activation of state guarantees to the aluminium smelter KAP in April 2012, according to a report on the 2012 budget execution published on the government’s website. The report was approved by the government during its regular session on June 13. The government thus revised upwards its 2012 budget gap estimate from EUR 164mn or 4.9% of GDP previously.

The budget gap to GDP ratio remained broadly unchanged at 5.86% of GDP in 2012 compared to the year before, as the country’s economy contracted 0.5% in 2012. However, it overshot significantly the official target of 3.3% of GDP (EUR 190mn, following budget revision in mid-2012).

Total financing needs, including budget deficit and debt repayments stood at EUR 331mn, up from EUR 322mn a year earlier.

Budget revenue dropped 0.7% to EUR 1.12bn due mainly to declining VAT proceeds (down 9.6% to EUR 355mn). Revenue accounted for 97.5% of the annual plan and for 33.6% of GDP.

Expenditures also edged down 0.2% to EUR 1.32bn (39.4% of GDP) mainly due to capital expenditures’ cuts (down 30% to EUR 59mn). Current expenditures rose 1.9% to EUR 1.3bn on the back of higher wages and goods and services spending. Expenditures exceeded the full-year plan by 5.3%.

In 2013 the Montenegrin government plans to trim its budget gap to 2.7% of GDP, by rising taxation (VAT and personal income tax) and improving budget revenue collection. The IMF recently said that additional austerity measures are needed to curb the country’s rising public indebtedness (at over 50% of GDP).

Montenegro's state budget, EUR mn 2011 2012 Plan y/y,%
Budget revenue 1,129.1 1,121.0 1,150.1 -0.7
Tax revenue 704.1 687.4 725.6 -2.4
--VAT 392.2 354.7 381.2 -9.6
Social contributions 353.6 362.3 352.0 2.5
--Personal income tax 81.6 82.3 81.5 0.8
--Corporate profit tax 36.1 64.0 46.9 77.3
Budget expenditures 1,318.8 1,316.6 1,260.2 -0.2
Current expenditures 1,234.7 1,257.8 1,194.7 1.9
--Wages and contributions 371.3 374.7 376.6 0.9
--Goods and services 104.0 153.7 146.7 47.8
Capital expenditures 84.1 58.7 76.7 -30.2
Deficit 189.7 195.6 110.1 3.1
Source: MinFin        

Related Articles

Montenegro’s PM confirms readiness to join Nato - despite shove from Trump at alliance summit

Montenegro’s Prime Minister Dusko Markovic said on May 25 that the Adriatic country is fully prepared to ... more

Ex-Montenegrin President Marovic missing after receiving prison sentence

Montenegro’s court issued an arrest warrant on May 12 for former President Svetozar Marovic who has not been found in his hometown and has not ... more

Adriatic ports hit by Venice tourist clampdown

The number of cruise ships visiting Dubrovnik and other Croatian ports is set to fall dramatically in 2017, a new report presented at the Adriatic Sea Forum has revealed.  As the historic ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss