director - Ministarstvo finansija

Macrofiscal report
BULLETIN OF THE MINISTRY OF FINANCE/JANUARY-MARCH 2006
Report on macrofiscal developments
in the 1st quarter of 2006
The Report on macrofiscal developments in the 1 st quarter of 2006
has been based on data under the financial statements of the budget of
the Republic of Montenegro, extrabudgetary funds and local self-government
units. The objective of the Report is to monitor realization of
planned macrofiscal dimensions quarterly.
Objectives of the public spending policy in 2006 include: continuation
of the reforms implementation towards the accession to the EU;
formalization of the grey economy; competition protection and
improvement of competitiveness; companies and banks restructuring;
and maintaining macroeconomic stability together with reduction of
the public spending.
Public spending in 2006 is projected to the amount of 785,26 mil.
eur, or 44,64% of the GDP of the Republic of Montenegro. Deficit in
public spending is projected to amount 38,77 mil. eur or 2,2 % of GDP.
1. PUBLIC SPENDING
Public spending in the first quarter of 2006 amounted to 174.13
mil.eur. Deficit in public spending in the same period amounted to 1.99
mil.eur, out of which Government budget deficit accounts for 5.49 mil.eur,
Pension and Disability Insurance Fund - 0.63 mil.eur , Health Insurance
Fund- 0.46 mil.eur and local self-governments - 0.69 mil.eur. The
Employment Agency has made a surplus to the amount of 3.50 mil.eur.
Deficit in public spending, together with net repayment of domestic
and foreign debt, was financed from the privatization receipts to the
amount of 3.59 mil.eur and by reduction of deposit by 7.99 mil.eur.
The Table below shows public spending realized in the first quarter
of 2006:
Total deficit in public spending on cash basis amounted 1.99 mil.eur
for the first quarter of this year. The deficit was realized as follows:
Government budget: to the amount of 5.49 mil.eur and was covered
by the privatization receipts to the amount of 0.65 mil.eur, and by
reduction of deposit to the amount of 11.19 mil.eur.
Pension and Disability Insurance Fund: to the amount of 0.63
mil.eur and was covered by the privatization receipts to the amount of
2.51 mil.eur.
Health Insurance Fund realized deficit in the first quarter to the
amount of 0.46 mil.eur and was financed by reduction of deposit at the
amount of 1.77 mil.eur
Employment Agency has made a surplus to the amount of 3.50
mil.eur , and if income from the sold property to the amount of 0.42
mil.eur is added to the above sum, the deposit amounts to 3.92 mil.eur.
Local self-government has realized deficit to the amount of 0.69 mil.eur,
which was financed by reduction of deposit to the amount of 2.06 mil eur
and net repayment of domestic credits to the amount of 1.43 mil.eur.
2. BUDGET OF THE REPUBLIC OF MONTENEGRO
Current revenues of the Budget of the Republic of Montenegro in
the first quarter of 2006 amounted to 102.88 mil. eur, representing an
increase by 16,54 % as compared to those planned for the same period.
As compared to the same period in 2005, the current revenues are higher
by 42,65 %.
Revenues realized in the first quarter are higher than those planned,
providing conditions for budget execution as planned, provided that
planned dynamics of increase is realized by the end of current year.
Positive trend was particularly achieved with respect to the following
types of revenues:
Corporate Income Tax is higher by 1,77 mil. eur, or 89,05 % as
compared to the plan for the same period,
Real Estate & Rights Transfer Tax is higher by 0,3 mil. eur, or
52,33 % as compared to the plan for the same period,
Value Added Tax is higher by 13,51 mil. eur, or 36,05 % as compared
to the plan for the same period in 2006, which is in line with
increasing trend in collection of this type of tax,
International Trade and Transactions Tax is higher by 2,19
mil. eur, or 28,09 % as compared to the plan for the 1 st quarter of
2006.
Expenditures of the Budget of the Republic of Montenegro for the
period from January to March 2006, are executed to the amount of
109.10 mil. eur, being lower by 22.04 % than expenditures planned for
the 1 st quarter of 2006.
The following Table shows a comparative review of receipts and
expenditures of the Budget of the Republic of Montenegro realized in
the 1 st quarter of 2006.
3. PENSION AND DISABILITY INSURANCE FUND
Review of receipts and expenditures realized by the Pension and
Disability Insurance Fund in the 1 st quarter of 2006 is given in the following
Table:
Current revenues of the Pension and Disability Insurance Fund are
realized to the amount of 26,57 mil. eur, being lower than planned by
4,13 mil. eur. In the first quarter of 2006, contributions were collected
to the amount of 26,26 mil. eur, being lower than planned by 4,24 mil.
eur. Transfers from budget amounted to 13,14 mil. eur, being lower than
planned ones by 4,19 mil eur.
Total spending by the Pension and Disability Insurance Fund
amounts to 40,72 mil. eur, being lower than planned by 7,31 mil. eur,
mainly due to the Fund’s incapability to fully meet its liabilities to the
Health Insurance Fund with respect to the health care of pensioners.
Deficit of the Pension and Disability Insurance Fund amounted to 0,63
mil. eur.
4. REPUBLIC HEALTH INSURANCE FUND
Total revenues realized by the Health Insurance Fund amounted to
17,59 mil. eur, which is lower than planned by 1.77 mil. eur. Revenues
from contributions amount to 16.20 mil. eur, being lower than planned
by 2.96 mil.eur, while received transfers amount to 4,73 mil. eur, being
lower than planned by 3.86 mil.eur.
Review of revenues and expenditures of the Health Insurance Fund in
the period from January to March 2006 is given in the following Table:
5. EMPLOYMENT AGENCY OF MONTENEGRO
Total receipts of the Employment Agency of Montenegro amounted
to 9.07 mil. eur, being higher than planned by 57.10% mil. eur. Revenues
from contributions amount to 1.08 mil. eur, being lower than planned
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