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Montenegro

Montenegro: Budget surplus in July reaches 41.3 mil. €

According to the data of the Ministry of Finance of Montenegro, in the movement of fiscal indicators after June this year and the budget surplus of Montenegro of 3 million euros, the positive results continue, because the budget surplus in July reaches 41.3 million euros or 0.9% of estimated GDP.

The budget surplus in June and July 2021 shows a significant recovery in economic activity, especially given that in the same period in 2019, record budget revenues from tourism amounted to 0.8 million euros and 5.3 million euros. The surplus in these two months of 2021 was recorded even after the sharp decline in 2020, when the deficit was 47.2 million euros in June and 56.3 million in July.

From the beginning of January to the end of July 2021, the budget deficit is lower by 86.4 million euros or 42.1% than planned and amounts to 118.9 million euros or 2.6% of GDP. This is a deficit of € 151.8 million or 56.1% lower compared to 2020.

The main reasons for the achieved result are the good collection of revenues and the lower realization of expenditures compared to the first plan.

Budget revenues for the seven months of this year amounted to 982 million euros or 21.2% of GDP, which is almost 100 million euros or 11.3% more than in the same period of 2020. Compared to the plan, they are at the level 99.6%. If the revenues from donations, which depend mainly on the dynamics of withdrawal of funds from donors, would be excluded from the plan, ie execution, the total budget revenues are above the plan by € 7.6 million, which shows the effect of increasing economic activity for budget revenue collection.

The increase in revenues was mostly contributed by the increase in the collection of revenues from value added tax, which are higher compared to the same period last year by € 42.8 million or 14.2%. Compared to the plan, these revenues are higher by € 14.7 million or 4.5%, which indicates a recovery of economic activity, but also greater tax discipline, as well as positive effects of the implementation of electronic fiscalization of tax registers.

Excise revenues also recorded an increase compared to the comparable period in 2020, as well as compared to the plan by € 8.6 million or 7.5%, or € 6.3 million or 5.4%. This increase in revenue so far offsets the planned effect of the proposed legal solutions related to excises, and since mid-May this year, along with two other unapproved bills important for the calculation of revenue undeclared, they are in parliamentary procedure.

We note that budget revenues in July this year amounted to 194 million euros, which compared to the same month in 2020 more to 59.7 million euros or 44.5%. The collection in July is even higher than in July 2019 with 19.8 million euros or 11.4 percent.

Budget expenditures in the period January – July 2021 amounted to euro 1,100.9 million or 23.7% of estimated GDP. Compared to planned expenditures, they are lower by € 90 million or 7.6%. Compared to the same period of 2020, budget expenditures are lower by € 51.9 million or 4.5%.

Lower-than-planned performance was recorded for almost all expenditure categories. Current expenditures amounted to € 477.4 million and were lower by € 45.6 million or 8.7% compared to the planned one, as well as by € 13.7 million compared to the comparable period in 2020.

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