The deficit of the consolidated budget in the first four months of 2023 was 23.5 billion dinars. This is 72 percent less than the deficit in the same period last year.
Although inflation has a positive impact on the budget, as VAT revenues have increased, while costs have depreciated, this year almost all tax revenues are actually decreasing, writes Danas, reporting the results of the Quarterly Monitor.
Total public revenues, when inflation is included, decreased for the first four months of this year compared to the same period last year by 4.2 percent, and the decline in tax revenues was even greater, by 5.9 percent, according to data from the Ministry of Finance.
The most important tax for the budget is VAT, and its real drop is 9.5 percent for the first four months. This decline was attracted by the reduction of VAT on imports, which amounted to 16.8 percent in real terms.
The VAT collected in traffic in the country increased in real terms by 42.7 percent. The decrease in VAT from imports, as it is added, is mainly a consequence of the reduction in energy imports, which led to a 12 percent drop in excise duty revenue in real terms, primarily due to less fuel excise duty collected (fuel prices are cheaper than a year ago).
The Minister of Finance, Siniša Mali, recently stated that the deficit for five months is 85 billion dinars smaller than planned, despite giving 10,000 dinars per child under the age of 16 and an extraordinary increase in salaries and pensions.
In real terms, wage income also falls, and from January to April, when inflation is calculated, they are lower by 0.6 percent, and as employment has increased, this data indicates a real wage decline.
Donations also made a considerable contribution to budget revenues, and as stated at the presentation of the Quarterly Monitor, the budget received aid from the EU in the amount of 150-160 million euros, seven times more than last year in the same period.
As stated, the decline in state income is a consequence of the decline in real income and consumption due to inflation, as well as imports, and it is also possible that there are problems with the efficiency of collection.
However, it is added that despite the decline, public revenues in the first quarter were above the plan, primarily due to higher than expected inflation, while public expenditures will probably be lower than planned due to the better energy situation.
Inflation, on the other hand, devalued tax revenues, but even more expenses, and this is the main reason for the better state of the state coffers than expected. In real terms, public expenditures of the consolidated budget are nine percent lower than in the same period last year.
As noted, the costs for salaries in the public sector were reduced by eight percent, the purchase of goods and services by 14.6 percent, and the costs for subsidies by 20 percent. Only transfers for pensions increased in real terms by 3.5 percent and social assistance by 0.3 percent.
As it is emphasized, the costs of state guarantees for loans that were activated also increased by as much as 90 percent. Budget loans increased three times compared to the first four months of last year.
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