Macedonia's central government budget deficit widened to MKD 17.5bn (EUR 283.4mn) in January-September from MKD 15.8bn in the same period of 2013, finance ministry data showed. We estimate that the nine-month gap is equivalent to 3.3% of the projected 2014 GDP. We use the ministry’s latest (as of October) 2014 nominal GDP forecast, which predicts real growth of 3.5% and a GDP deflator of 1.6%. The nine-month deficit reached 89% of the new full-year target of MKD 19.6bn (3.7% of GDP).
Total budget revenues increased by a real 1.7% y/y to MKD 104.6bn in January-September, and total budget expenditures rose by a real 3% y/y to MKD 122bn.
In September alone, the budget deficit narrowed by 52.4% y/y to MKD 476mn. Total revenues increased by a real 15.2% y/y to MKD 12.7bn, and total expenditures grew by a real 9.5% y/y to MKD 13.2bn.
The biggest contribution to revenue growth came from taxes, which expanded by a real 18.5% y/y to MKD 7.1bn in September. Positive annual growth was reported for VAT (+27.4% to MKD 3.6bn), personal income tax (+31.9% to MKD 1.1bn) and excises (+10.8% to MKD 1.7bn). Revenues dropped y/y in real terms for profit tax (-6.6% to MKD 240mn), import duties (-3% to MKD 339mn) and other taxes (-48.9% to MKD 74mn).
| Central govt budget, MKD mn | |||||
| Budget 2014 | Sep'14 | % y/y real | Jan-Sep'14 | % y/y real | |
| TOTAL REVENUES, incl.: | 155,554 | 12,742 | 15.2% | 104,564 | 1.7% |
| Taxes | 85,189 | 7,070 | 18.5% | 59,848 | 5.8% |
| Contributions | 44,703 | 3,702 | 7.5% | 32,154 | 4.6% |
| TOTAL EXPENDITURES | 175,157 | 13,218 | 9.5% | 122,018 | 3.0% |
| Current Expenditures | 154,073 | 12,044 | 12.5% | 110,424 | 3.6% |
| Capital Expenditures | 21,084 | 1,174 | -14.1% | 11,594 | -3.0% |
| BUDGET BALANCE | -19,603 | -476 | -52.8% | -17,454 | 10.9% |
| Source: Ministry of finance |
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