Montenegro: Budget surplus in July amounts to 41.3 mil. €

Montenegro: Budget surplus in July amounts to 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, positive results continue, because the realized budget surplus in July amounts to € 41.3 million or 0.9% of estimated GDP.

The budget surplus in June and July 2021 indicates a significant recovery in economic activity, especially bearing in mind 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 big drop 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 or 42.1% than planned and amounts to € 118.9 million or 2.6% of GDP. This is a € 151.8 million or 56.1% lower deficit compared to 2020.

The main reasons for the achieved result are a good collection of revenues and lower realization of expenditures compared to the originally planned.

Budget revenues for the seven months of this year amounted to € 982 million or 21.2% of GDP, which is almost € 100 million or 11.3% more than in the same period in 2020. Compared to the plan, they are at the level of 99.6%. If the revenues from donations, which primarily depend 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 economic activity growth on budget revenue collection.

The growth of revenues was mostly contributed by the growth of 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 the positive effects of the implementation of electronic fiscalization of tax registers.

Revenues from excises 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 revenues so far compensates for the planned effect of the proposed legal solutions related to excises, and since mid-May this year, along with two other unapproved important draft laws for the calculation of undeclared revenues, they are in the parliamentary procedure.

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

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

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