Press release: Montenegro Budget execution in 2020 (GDDS table 12)
The COVID-19 virus pandemic and measures aimed at preventing its spread, directly affected the economic flows in the country and caused negative consequences for the entire economy. The endangered liquidity of the economy as a result of limited economic activity in the conditions of the pandemic, as well as the need for additional financing due to the implementation of a package of measures to support the economy and citizens, have led to the largest budget deficit since independence. Despite of unfavorable epidemiological situation that limited economic activity and led to a negative movement of fiscal parameters, the liquidity of the Budget has been preserved and all planned budget obligations have been settled in a timely manner.
Budget revenues in 2020 amounted to 1,639.1 mill. € or 38.3% of the estimated GDP (€ 4,279.0 million), which is by 65.9 mill. € or 3.9% less than planned by the Law on Amendments to the Law on Budget.
The decrease in revenue collection is primarily the result of a significant decrease in the realized tourist turnover, so in relation to the plan according to the Supplemental budget, the largest negative deviation was recorded in the categories that depend on the realized turnover, namely: value added tax in the amount of 86.0 mill. € or 14.0% and excise in the amount of 16.0 mill. € or 7.2%.
Other revenues recorded a negative deviation in the amount of 16.3 mill. € or 30.7% due to the fact that planned payment based on the dividend of energy companies majority owned by the state has not been made.
Considering the fact that the revenue collection plan in October also planned the payment of the debt by "Montenegro Airlines" in the amount of 9.0 mil. € deviation was also recorded in the category receipts from repayment of loans.
On the other hand, revenues from taxes and contributions on salaries marked a cumulative growth, in the amount of 44.2 mill. € or 7.3% in relation to the planned by Supplemental budget, despite the projected employment decline of 5.5%. Higher collection compared to the planned is a result of the subsidization of wages for employees in industries directly affected by measures to limit the activities within the second and third package of economic measures, where the condition for obtaining a subsidy was that notifications on this basis were regularly paid and employers kept the number of employees before the pandemic.
As a consequence of the strong growth of economic activity from the previous year, profit tax is higher by 10.8 mill. € or 16.0% compared to the planned.
Compared to the same period last year, budget revenues are lower by 246.1 mill. € or 13.1% due to limited economic activity caused by the COVID-19 virus pandemic and the implementation of measures to mitigate the negative effects on the economy and citizens.
Budget expenditures in 2020 amounted to 2,058.6 mill. € or 48.1% of GDP and are higher than planned by 17.7 mill. € or 0.9%.
The most significant deviation from the plan was recorded in the category of social security transfers in the amount of 19,0 mill. € or 3.3%, due to lower realization in the category pension and disability insurance in the amount of 14.1 mill. €, as well as social security in the amount of 4.1 mill. €. On the other hand, compared to the previous year, this category of expenditures recorded an increase of 7.2 mill. € or 1.7% primarily as a result of the implementation of the new Law on Pension and Disability Insurance.
Also, in the reserve category a deviation was recorded in the amount of 17.2 mill. € or 12.9%, as a result of the fact that the previously planned funds on the basis of the legal solution for the financial rehabilitation of "Montenegro Airlines" were not executed in the planned amount.
In the structure of budget expenditures, current expenditures amounted to 857.9 mill. € and are higer by 17.8 mill. € or 2.1% of the planned, primarily due to higher realization in the category of expenditures for services in the amount of 12.3 mill. €.
Capital expenditures were realized in the amount of 223.9 mill. €, which is by 29.1 mill. € or 14.9% more than planned, as a result of the continuation of works on the started capital projects, as well as the realization of credit funds on this basis planned within the current budget, while compared to the previous year they are lower by 121.0 mill. € or 35.1%, as a consequence of the reduced intensity of works on the construction of the priority section of the Highway.
In the same period, the capital budget was realized in the total amount of 175.3 mill. € which is for 9.6 mill. € more than planned, while compared to the previous year less by 97.1 mill. €, which is primarily the result of the reduced intensity of works on the section of the Highway due to the pandemic.
Compared to the same period last year, total budget expenditures are higher by 30.1 mill. € or 1.5% due to need for additional funding for the health system during the pandemic, as well as the implementation of three packages of measures aimed at combating the negative effects of the pandemic and helping citizens and the economy.
In 2020, the dynamics of budget revenues and expenditures affected the realization of the budget deficit in the amount of 419.5 mill. € or 9.8% of GDP, which is 83.6 € or 24.9% higher 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;
* Capital Budget data represent the amounts of planned and executed expenditures by project classification (all categories of expenditures that are in the function of implementation of the project financed by the Capital Budget)