Government increases concessionary payments prior elections

Tirana Times
By Tirana Times July 18, 2019 12:41

Government increases concessionary payments prior elections

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  • Consequently, in the first five months of the year the budget has resulted in surplus, with costs that were lower than the income. In June however, the budget resulted in a deficit.

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TIRANA, July 18- The performance of budget spending has further deteriorated during the first six months of the year, as official data from the Ministry of Finance show that spending on investment has been cut because of the increased local government expenditure driven by local government elections. Salaries have also increased at the same time and the budget went through a deficit as spending grew at higher rates than income.

The state budget spent 228.7 billion lek (1.8 billion euros) during the observed period, with a 6.2 percent increase compared to 2018, while compared to the plan they were 0.46 percent lower. Operating and maintenance expenditures, some of which go for healthcare concession payments, scanning services, etc., had the greatest surplus on the plan by 2.8 billion lek (22 million euros), increasing by 17 percent compared to the same period last year.

Concessions such as those in health, check-ups, laboratory services, dialysis services, are currently paid with budget funds but at much higher rates than when they were provided by the state itself. Additional funds for these services are accommodated by capital expenditures.

Local government elections spurred more spending than the budget plan. The central government transfers these funds to local governments in the form of conditional or unconditional transfers. It was spent 28.6 billion lek (almost 234 million euros) from the estimated 28.5 billion lek (233 million euros).

This period also saw an unusual increase in operating costs. The data show that during the first half of 2019 were spent 21.6 billion lek (176.5 million euros), up by 16 percent from the 2018 figure and 13 percent more than the 2019 plan. Salaries for wages increased by 4.1 percent and amounted to 830 million lek (6.7 million euros) more than the plan of the beginning of the year.

During the first half of the year there was an increase of debt spending by about 6.7 per cent compared to the previous year, and the growth of current expenditures increased 8.2 percent more than 2018 and 2.3 percent more than period’s plan. Expenditures indicate a decline in productivity-boosting items such as capital spending.

During the past year and the first months of this year, finances have been prudent with spending, compensating for revenue growth under planning. Consequently, in the first five months of the year the budget has resulted in surplus, with costs that were lower than the income. In June however, the budget resulted in a deficit of 3.3 billion lek (27 million euros).

Revenues collected from taxes, customs, social insurance and others in the first six months of the year were 225.5 billion lek (1.8 billion euros), according to fiscal statistics published by the Ministry of Finance. Compared with the same period of the previous year, these revenues increased by 3.9 percent, supported by personal income tax, profit tax, local taxes, social insurance contributions, while revenues from VAT had the most negative performance. In relation to the plan, revenues are 3.6 billion lek or 30 million euros less.

Tirana Times
By Tirana Times July 18, 2019 12:41