Montenegro’s Jan-Oct budget gap narrows 16% y/y to EUR 116mn, exceeds annual target

By bne IntelliNews November 21, 2013

Montenegro’s budget deficit narrowed by 15.7% on the year to EUR 115.5mn in January-October 2013, as stronger revenue growth offset a milder increase in expenditures, data from the finance ministry showed. The ten-month budget deficit equalled to 3.5% of the full-year GDP projection, IntelliNews calculations based on the latest finance ministry's full-year projection showed.

Nevertheless, the January-October budget gap was by 12.4% 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 bankrupt aluminium smelter KAP's loans. In response, the government has said the full-year gap might reach EUR 186.9mn, or 5.3% of the GDP.

Total budget revenue rose 9.7% y/y to EUR 997mn in January-October underpinned by higher tax collection. VAT revenue climbed 18.6% y/y to EUR 356mn, accounting for 36% of total budget income. The increase reflected the VAT rate hike from 17% to 19% in July. Social contributions also went up by 8.7% y/y to EUR 308mn (31% share in total).

The ten-month budget expenditures grew by 6.4% y/y to EUR 1.1bn, lifted by higher current expenses and KAP-related spending. Current expenditures increased by 7.9% y/y to EUR 1.08bn in January-October due to rising interest, social security spending and public sector transfers. On the other hand, capital expenditures continued retreating, shrinking 25.6% to EUR 36mn over the period. They accounted for just 3.3% in total budget expenses in January-October, down from 4.7% a year ago.

The Montenegrin government is expected to approve soon the 2014 budget drat which will target a budget deficit of EUR 66mn (1.89% of the full –year GDP forecast) considerably below the estimated EUR 187mn (5.3% of GDP) budget gap in 2013. The EBRD warned in its latest Transition Report issued on Nov 20 that the Montenegrin government will not be able to find a sustainable solution to the widening fiscal gap unless it resolves the liabilities of KAP.

Montenegro budget, EUR mn Jan-Oct'12 Jan-Oct'13 y/y,% deviation from the plan, %
Total revenue 908.8 996.9 9.7 5.7
Tax revenue 578.0 626.5 8.4 6.8
--VAT 299.8 355.5 18.6 13.1
--Personnal income tax 65.2 72.8 11.7 2.4
--Excises 121.4 135.2 11.3 2.4
Social contributions 283.5 308.0 8.7 3.7
Total expenditures 1,045.8 1112.4 6.4 6.3
Current expenditures 996.9 1076.1 7.9 8.5
--Goods and services 117.0 65.4 -44.1 -2.2
--Salaries and wages 312.2 306.6 -1.8 -1.1
--Interests 522.2 618.1 18.3 5.3
--Subsidies 203.6 112.5 -44.8 -5.5
--Social security transfers 398.8 400.1 0.3 -3.6
--transfers to institutions, individuals, NGOs and public sector 23.2 71.7 208.5 -6.5
Capital spending 48.8 36.3 -25.6 -33.6
Repayment of guarantees 24.0 103.1 330.1 /
Deficit/Surplus -137.0 -115.5 -15.7 12.4
Source: Finance ministry        

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:

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

Dismiss