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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