Montenegro Budget execution in the period January – May 2021 (GDDS table 5)
Budget revenues in the period January - May 2021 amounted to 628.6 mill. € or 13.6% of the estimated GDP (4,636.6 mill. €), which is at the level of planned, while compared to the comparable period in 2020 it is higher by 13.0 mill. € or 2.1%.
Evidence that the recovery of economic activity is visible is the growth of revenues in April and May by 14.8% and 18.0%, respectively, compared to the same months of the previous year. Thus, the growth of revenues in the period January - May of only 2.1% is primarily the result of high collection of revenues achieved in the period before the pandemic (January - March 2020).
The growth of almost all revenue categories compared to the previous year indicates a gradual recovery of economic activity as a result of the improvement of the epidemiological situation in the country, and thus the mitigation of epidemiological measures that limited economic flows.
Revenues from value added tax in the observed period amounted to 218.8 mill. € and are higher by 2.1 mill. € or 1.0% compared to the same period last year, while compared to the plan they are slightly lower. Growth is particularly visible in April and May when the average growth rate of this category was 27.8%.
Revenues from excises were collected in the amount of 76.5 mill. € which is 3.1 mill. € or 4.3% more than planned as a result of the collection above the plan of almost all categories of excise products. Compared to the previous year, the decline in previous months has slowed down significantly and now amounts to only 1.0 mill. € or 1.2%.
Despite the significant decline in economic activity during 2020, the collection of revenues based on corporate income tax is at approximately the same level as the previous year, while revenues on this basis are higher than planned as much as 13.3 mill. € or 33.8%.
Compared to the same period last year, the contributions are higher by 10.3 mill. € or 5.8% while compared to the plan they are lower by 6.3 mill. € or 3.2%.
The category of other revenues recorded a negative deviation of 1.5 mill. € in relation to the same period in 2020, but this category of revenues is expected to grow in the coming period in accordance with the Law on Budget for 2021, i.e. the Government Conclusion which obliges majority state-owned companies to pay the profit realized in 2020 to the state budget in accordance with the ownership share.
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 first five months of 2021 has been determined.
Budget expenditures in the period January - May 2021 amounted to 792.2 mill. € or 17.1% of the estimated GDP and compared to the planned they are lower by 81.7 mill. € or 9.3% 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 9.5 mill. € or 1.2% due to higher realization of certain categories.
Repayment of liabilities from the previous period recorded an increase compared to the comparable period in 2020 in the amount of 10.0 mill. € as a result of enforced collection based on the debt of "Montenegro Airlines" to "Airports of Montenegro" in the amount of 9.5 mill. €.
Also, the reserves category continuously records growth compared to the comparable period of the previous year, primarily due to the allocation of funds for the founding capital of the new national airline "To Montenegro", but also monthly allocations based on subsidizing salaries of employees in vulnerable activities.
The growth in relation to the comparable period of the previous year is also recorded at the category of gross salaries and contributions in the amount of 20.8 mill. € or 10.1% due to the increase of salaries in the sectors of Health and Education, as well as the different treatment of the gross salary fund of the University of Montenegro during 2020 compared to 2021.
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 18.0 mill. € or 16.0% 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 347.8 mill. € and are lower by 33.6 mill. € or 8.8% compared to the planned. Lower realization compared to the planned is primarily determined by the lower realization of expenditures for services in the amount of 11.8 mill. €. Compared to the comparable period in 2020, current expenditures are lower by 3.1 mil. € or 0.9%. Regarding capital expenditures, they were realized in the amount of 50.6 mill. €, which is less by 28.1 mill. € or 35.7% of the planned, while in relation to the realization in the same period in 2020 they are lower by 9.4 mill. € or 15.6%.
In the period January - May 2021, the dynamics of budget revenues and expenditures affected the realization of the budget deficit in the amount of 163.7 mill. € or 3.5% of GDP, which is 81.0 mill. € or 33.1% less than planned.
Attachment: GDDS 5 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.
 In 2020, all costs of the University of Montenegro (including gross salaries) were planned on the expenditure category of Transfers, while temporary financing was used to reclassify expenditures, which increased the total fund of gross salaries in 2021.