Albania’s general budget deficit widened by 42.7% y/y to ALL 65.4bn (EUR 466mn) in 2013 as revenue fell, while expenditures increased, finance ministry data showed. In our calculations, the deficit accounted for 4.8% of the projected full-year GDP, up from 3.5% a year earlier.
Total budget revenues declined by 0.5% y/y to ALL 328.6bn. Tax revenues edged up by 0.2% y/y to ALL 301.4bn, but this was unable to offset a 10.1% y/y drop in non-tax revenues.
The combined revenue from indirect taxes fell by 1.1% y/y as VAT revenues decreased by 3.1% y/y with VAT on domestic consumption down 3.3% y/y and VAT, collected by the customs, dropping 5.9% y/y. Moreover, revenues from customs duties fell by 5.9% y/y. By contrast, excise receipts increased by 6.1% y/y.
Revenues from personal income tax advanced by 5.6% y/y in 2013.
On the expenditure side, total budget spending increased by 4.7% y/y supported by a 5.1% y/y rise in current expenditure and a 6.1% y/y increase in capital expenditure. In our view, higher spending on public investments could be partly explained with the pre-election expenditures as Albania held parliamentary elections on June 23.
We note that the government projects the budget deficit to widen to 6.5% of the GDP in 2014.
General Budget, 2013, ALL bn | |||
2012 | 2013 | % y/y | |
Total revenues | 330.4 | 328.6 | -0.5 |
VAT | 116.5 | 112.9 | -3.1 |
Corporate profit | 16.9 | 15.1 | -10.3 |
Excise | 36.4 | 38.6 | 6.1 |
Personal income | 28.0 | 29.6 | 5.6 |
National | 28.7 | 28.6 | -0.4 |
Customs duties | 6.1 | 5.8 | -5.9 |
Total social contributions | 57.4 | 60.0 | 4.6 |
Social insurance | 49.5 | 51.1 | 3.1 |
Health insurance | 6.6 | 7.4 | 12.4 |
Non-tax Revenues | 24.0 | 21.6 | -10.1 |
Total expenditures of which: | 376.2 | 394.1 | 4.7 |
Current | 312.6 | 328.6 | 5.1 |
Capital | 61.7 | 65.4 | 6.1 |
Balance | -45.9 | -65.4 | 42.7 |
Balance (% of GDP forecast) | -3.5 | -4.8 | |
Source: Ministry of finance |
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