Serbia's Jan-Jul consolidated budget gap shrinks 26% y/y to EUR 731mn

By bne IntelliNews August 15, 2013

Serbia's consolidated budget deficit narrowed 25.9% y/y to RSD 83.3bn (EUR 731mn) in January-July 2013 as higher revenue growth offset a mild expenditures increase, data from the finance ministry showed.

The seven-month budget deficit accounted for around 2.2% of the full-year GDP forecast, down from 3.3% a year earlier, according to IntelliNews calculations based on data from the finance ministry.

The consolidated budget revenue rose 6.0% y/y to RSD 829bn in January-July, lifted by higher tax revenue. Spending inched up 2% to RSD 913bn over the period due to rising social transfers, interest and employment spending.

Income from VAT grew 9.9% to RSD 227bn in January-July, reflecting the VAT hike as of October 2012 while social contributions revenue increased 7.3% to RSD 229bn. Income from profit tax remained in the red, shrinking 5.8% y/y to RSD 35bn in January-July, reflecting deteriorated economic environment in 2012 as the economy contracted a real 1.7%.

Spending growth remained subdued as rising social transfers, employment and interest expenditures were partly offset by falling subsidies and goods and services expenses.

Capital expenditures continued retreating, declining by 38% y/y to RSD 38bn in January-July.

Serbia’s parliament endorsed on July 5 the 2013 budget revision, which aims to prevent the consolidated budget gap from exceeding 5.2% of GDP in 2013. 

Serbia's consolidated budget, RSD bn Jan-Jul'12 Jan-Jul'13 y/y,%
Consolidated revenue 782.0 829.3 6.0
Tax revenue 690.9 739.9 7.1
--VAT 206.3 226.8 9.9
--Social contributions 213.3 228.8 7.3
--Corporate income tax 37.0 34.9 -5.8
Consolidated expenditures 894.4 912.6 2.0
Current expenditures 822.0 866.5 5.4
--Goods and services 131.2 127.6 -8.1
--Employment 210.4 223.6 6.3
--Social assistance and insurance 370.3 394.4 6.5
-- Subsidies 53.3 49.6 -14.0
Capital expenditures 61.2 37.9 -37.9
Budget deficit/surplus -112.4 -83.3 -25.9
Source: Ministry of Finance    
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