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, %|
|--Personnal income tax||65.2||72.8||11.7||2.4|
|--Goods and services||117.0||65.4||-44.1||-2.2|
|--Salaries and wages||312.2||306.6||-1.8||-1.1|
|--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|
|Repayment of guarantees||24.0||103.1||330.1||/|
|Source: Finance ministry|
Montenegro’s government has decided to speed up the acquisition of Italian A2A's stake in the power firm EPCG, paying €68.9mn for a ... more
The European Commission slammed Montenegro for its lack of progress in fight against organised crime in its progress report released on April 17, and said that the country ... more
Boyko Borissov, prime minister of the current EU Council chair Bulgaria, called on April 10 on the leaders of the Western Balkan countries to preserve peace and ... more