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NewsMontenegro achieves €42 million budget surplus in first seven months of 2024

Montenegro achieves €42 million budget surplus in first seven months of 2024

In the first seven months of 2024, Montenegro achieved a budget surplus of €42 million, contrasting with the anticipated deficit, according to the Ministry of Finance. This surplus represents an improvement of €220.3 million over the initial projections.

The Ministry attributed the surplus to strong revenue collection and positive fiscal trends, with budget revenues exceeding the plan by 6.5%. The surplus equates to 0.6% of the estimated Gross Domestic Product (GDP).

Initially, a deficit of €178.3 million was projected, meaning the budget performance was €220.3 million better than expected. Excluding one-off revenues, budget receipts increased by €237.2 million, or 18.2%, compared to the same period last year.

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Total budget revenues by the end of July amounted to €1.57 billion, which is 22.3% of the estimated GDP.

The capital budget was realized at €78.6 million, making up 5% of total expenditure and 84.3% of the planned amount. This represents a 59.7% increase compared to the same period last year.

Revenue from corporate income taxes reached €197.6 million, reflecting a 45.5% increase compared to the previous year and 35.6% above the planned amount.

There was also a significant increase in revenue from personal income taxes, totaling €45.9 million, which is 19.9% above the plan and 45.8% higher than the same period last year.

Contributions amounted to €321 million, surpassing the plan by 5.3% and showing a 10.8% increase compared to the previous year.

The Ministry highlighted that the Tax Administration’s efforts significantly accelerated VAT refunds, contributing to a stable business environment and reducing business barriers. By the end of July, VAT revenue reached €655.4 million, 2.1% above the plan and 15.3% higher than in the same period last year. VAT refunds were €60.9 million, a 10.6% increase compared to the previous year.

Excise duty revenues also saw a notable increase, totaling €195.1 million by the end of July, 13.7% higher than the same period last year and 0.5% above the plan.

Other revenue categories grew by 8.5% compared to the plan.

In July, budget revenues totaled €260 million, representing a 25% increase compared to the same period last year and 8.4% above the plan. Consequently, a budget surplus of €11.5 million was achieved in July, compared to a projected deficit of €24.9 million.

The Ministry noted that nearly all revenue categories saw growth compared to both the plan and the previous year. Excise duties were almost unchanged from July of the previous year, with an 8.1% deviation from the plan.

Expenditure realization was 7.6% lower than planned. The state fulfilled all obligations in real-time, with no outstanding obligations awaiting payment.

Compared to the same period last year, expenditures increased by 17.9%, with significant deviations in pension and disability insurance payments due to an increase in the minimum pension, as well as transfers to institutions, public health institutions, and higher wage allocations due to sectoral collective agreements implemented last year.

Current expenditures for the first seven months amounted to €1.45 billion, or 95% of total spending. Current budget expenditures reached €595.9 million, which is 92.6% of the plan, with lower spending primarily in wages, material expenses, and maintenance. Interest payments were lower than planned by €8.5 million, in line with the debt repayment schedule.

Transfers for social protection amounted to €571.9 million, nearly €12 million below the plan, covering social protection and pension and disability insurance rights, in line with actual calculations that were lower than initially projected.

In July, expenditures totaled €248.4 million, 6.1% below the plan, with the deviation primarily due to lower execution for reserves and transfers to institutions, individuals, non-governmental organizations, and the public sector.

Transfers for social protection reached €88.66 million, €2.69 million above the plan, mainly for treatments outside the public healthcare system through the Health Insurance Fund.

The capital budget for July was realized at €18.7 million, representing 91% of the plan.

The Ministry of Finance aims to maintain the positive fiscal trends for the rest of the year through effective management and prudent execution of the state budget, ensuring public financial stability and adequate fiscal reserves for the upcoming year.

Supported byMercosur Montenegro

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