Montenegro Budget execution in the period January – April 2021 (GDDS table 4)
Budget revenues in the period January - April 2021 amounted to 491.8 mill. € or 10.6% of the estimated GDP (€ 4,636.6 mill.€) and compared to the comparable period in 2020 they are lower by 8.5 mill. € or 1.7% as a consequence of limited economic activity in the current year as opposed to positive macroeconomic developments in the first quarter of the previous year. Bearing in mind that since the end of March last year there was a complete suspension for most economic activities, the decline in revenues has slowed significantly and it is expected that in the coming period revenues will begin to grow compared to the previous year, taking into account the improvement of epidemiological situations and, consequently, the mitigation of epidemiological measures.
Compared to the plan, revenues are higher by 3.5 mill. € or 0.7% primarily due to higher collection of revenues from corporate income tax, whose realization is above the plan by 13.4 mill. € or 38.0%, which is an indicator of a high degree of tax discipline, even when the business took place in a pandemic. When we compare with the same period in 2020, the collection on this basis is at the level of the collection from the previous year.
Also, the category of fees continues to grow by 52.1% compared to the same period last year, as well as 12.1% compared to the plan, as a result of the collection that is realized based on the implementation of the Economic Citizenship Program.
On the other hand, the largest negative deviation compared to the same period of the previous year was recorded in the categories of value added tax and excise in the amount of 6.6 mill. € or 3.7%, or 5.2 mill. € or 8.2%, as a result of reduced turnover. In relation to the plan, the collection of revenues based on VAT is higher by 2.3 mill. € or 1.3%, while the collection of excise revenues is higher than planned by 2.6 mill. € or 4.6%, which indicates the growth of turnover, i.e. the gradual recovery of economic activity.
Negative deviation compared to the same period in 2020 was also recorded in the category of other revenues in the amount of 3.5 mill. € or 35.8%. Pursuant to the Draft Law on Budget for 2021, i.e. the Government Conclusion which obliges companies majority owned by the state to pay the profit realized in 2020 to the state budget in accordance with the ownership share, this category of revenues is expected to grow in the coming period.
Bearing in mind that the Law on the Budget for 2021 was not adopted by December 31 of the previous year, pursuant to Article 37 of the Law on Budget and Fiscal Responsibility, temporary financing was granted, according to which spending units are granted monthly funds up to 1/12 (one twelfth) actual expenditures in the previous fiscal year, in accordance with which the expenditure plan for January, February, March and April 2021 was determined.
Budget expenditures in the period January - April 2021 amounted to 633.9 mill. € or 13.7% of the estimated GDP and are lower than planned by 60.3 mill. € or 8,7% as a consequence of the fact that the plan was determined from the assumption of creating the necessary fiscal reserve for the needs of financing measures and activities in conditions of uncertainty during the pandemic.
Compared to the same period in 2020, budget expenditures are higher by 10.9 mill. € or 1.8%, primarily due to higher realization of the reserve category in the amount of 37.0 mill. € due to the allocation of funds for founding capital of the new national airline "To Montenegro", but also the continued implementation of assistance to the economy and citizens through support packages, most of which relates to employee wage subsidies.
On the other hand, the category of transfers to institutions, individuals, non-governmental and public sector recorded a lower realization compared to the same period in 2020 in the amount of 22.2 mill. € or 22.7% primarily due to lower allocations in the part of transfers to institutions in the observed period in 2021.
In the structure of budget expenditures, current expenditures were realized at the level of 279.6 mill. € and are lower by 26.0 mill. € or 8.5% compared to the planned. Lower realization compared to the planned is determined by the lower realization of almost all categories of current expenditures, primarily expenditures for services in the amount of 11.7 mill. €. Compared to the comparable period in 2020, current expenditures are lower by 6.0 mil. € or 2.1%. Regarding capital expenditures, they were realized in the amount of 41.8 mill. €, which is less by 17.1 mill. € or 29.0% of the planned, while in relation to the realization in the same period in 2020 they are lower by 2.2 mill. € or 5.0%.
In the period January - April 2021, the dynamics of budget revenues and expenditures affected the realization of the budget deficit in the amount of 142.0 mill. € or 3.1% of GDP, which is 63.8 mill. € or 31.0% less than planned.
Attachment: GDDS 4 montly data.xlsx
* The data in the GDDS table represents an overview of income and expenses by economic classification in one month, compared to the plan and the same period of the previous year.