Press realase: Montenegro Budget execution in the period January-February 2021 (GDDS table 2)
The unfavorable epidemiological situation in the country continues to dictate trends in the dynamics of budget revenues and expenditures in the period January - February 2021.
Compared to the first quarter of the previous year, which was characterized by strong growth of economic activity as a continuation of positive trends in macroeconomic indicators in 2019, a decline in budget revenues is expected in this period, as a result of economic activity in a pandemic.
Budget revenues in the period January - February 2021 amounted to 194.2 mill. € or 4.2% of estimated GDP (4,636.6 mill. €), which is by 3.3 mill. € or 1.7% less than planned. Compared to the same period last year, revenues are lower by 20.0 mill. € or 9.3% due to limited economic activity as a result of the implementation of measures to combat the negative effects of the COVID-19 virus pandemic on the economy and citizens.
As a result of reduced turnover compared to the comparable period of the previous year, and due to the declaration of a pandemic in March 2020, the categories of value added tax and excise recorded a decrease compared to the same period last year in the amount of 7.9 mill. € or 8.9%, i.e. 3.4 mill. € or 10.3%. Compared to the planned, the collection of revenues on the basis of VAT was realized above the plan by 1.5 mill. € or 1.9%, while the collection of excise revenues is higher than planned by 2.5 mill. € or 9.3%.
The highest increase of 0.8 mill. € or 18.8% compared to the same period last year was recorded in the category of fees, as a result of the collection of revenues generated by the implementation of the Economic Citizenship Program. Also, the collection of this category of income was realized above the planned by 1.7 mill. € or 47.9%.
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 and expenditure plan for February was determined.
Budget expenditures in the period January – February 2021 amounted to 284.4 mill. € or 6.1% of estimated GDP and compared to the planned they are lower by 74.6 mill. € or 20.8%, while compared to the same period in 2020 they are higher by 10.1 mill. € or 3.7%.
The recorded discrepancy in expenditures is a consequence of the fact that the plan was determined from the assumption of creating the necessary fiscal reserve for financing measures and activities in conditions of uncertainty during the pandemic.
In the structure of budget expenditures, current expenditures were realized at the level of 114.1 mill. € and are lower by 27.8 mill. € or 19.6% compared to the planned. The lower realization compared to the planned ones is determined by the lower realization of almost all categories of current expenditures, primarly expenditures for services in the amount of 11.9 mill. €. Compared to the same period in 2020, current expenditures are lower by 1.9 mill. € or 1.6%.
On the other hand, capital expenditures were realized in the amount of € 16.2 mill., which is less by € 15.3 mill. € or 48.6% than planned, while compared to the realization in the same period 2020, they are higher by 3.1 mill. € or 23.8%.
Compared to the same period in 2020, the largest deviation was recorded in the reserves category in the amount of 21.6 mill. € primarily due to the allocation of funds for the purchase of aircraft 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.
Also, the growth in relation to the comparable period of the previous year was recorded in the category of gross salary and contributions in the amount of 7.7 mill. € or 9.3% primarily due to the increase of the gross salary fund in the sectors of Health and Education.
In the period January - February 2021, the dynamics of budget revenues and expenditures affected the realization of the budget deficit in the amount of 90.2 mill. € or 1.9% of GDP, which is 71.3 mill. € or 44.2% less than planned.
* 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.