Finance Ministry data show government revenues during Jan-Nov. 2011 rose by only 0.8 percent, lower even to the same period in the crisis year of 2009 when they still managed to grow by 2.1 percent year-on-year
TIRANA, Nov. 15 – With only one fiscal month missing to complete the 2011 picture, government revenues progress during the first 11 months of this year have hit a record growth rate at least during the past decade, according to data from a report published this week by the Finance Ministry.
Data show government revenues during Jan-Nov. 2011 rose by only 0.8 percent, lower even to the same period in the crisis year of 2009 when they still managed to grow by 2.1 percent year-on-year. The 2011 performance comes at a time when the revenue targets were lowered with last July’s budget cut and some luxury products have seen an increase in their excise rates.
Latest Finance Ministry data show total government revenues during the first eleven months of this year rose by only 0.8 percent to 308.7 billion lek, failing to meet targets by 13 billion lek or 4.3 percent.
Last July, the government cut its revenue growth expectations to 5.9 percent compared to an overoptimistic figure of 11.5 percent under the initial 2011 budget.
The situation is mainly a result of poor progress in tax collection, with revenues reported 4.3 percent up year on year, but 4.4 percent down or around 12.5 billion lek less compared to the target for the first 11 months of this year.
VAT and excise tax revenues, which account for 50 percent of total tax revenues and are indirect indicators to measure domestic consumption, have grown by only 3.3 percent and 3.4 percent, respectively during the Jan-Nov period, yet failing to meet targets.
Total expenditure during the first eleven months of this year has been at 4.5 percent less than planned or 15.7 billion lek lower than the new targets set in July 2011.
For the first 11 months of this year, the budget deficit has risen by a record 63.6 percent to around 38 billion lek as revenues continue underperforming standing at almost the same 2010 levels while expenditure has risen by 5.4 percent.
Total government expenditure rose to 333.5 billion lek in Jan-Nov 2011 mainly as a result of staff and pension coverage spending. Capital investments have also risen by 7 percent to 58.3 billion lek but are down 8.7 percent compared to the target for the 11 months of this year.
In its latest review of the macroeconomic framework, government expects the country’s GDP to grow by 3.9 percent in 2011 and 4.3 percent in 2012 compared to 5 percent and 5.1 percent respectively last July when the budget was cut by 5 percent.
Revenue expectations have also been lowered to around 330 billion lek compared to 344 billion lek under mid-year budget review. Meanwhile, expenditure has also been cut by 14.2 billion lek to 376.6 billion lek.
While the deficit has been left unchanged at 3.5 percent of the GDP, expenditure on pension contributions has been raised by another 1.5 billion lek to 86.4 billion lek for 2011.
Public debt is expected to be at 59.3 percent of the GDP for 2011 and 59.4 percent in 2012.
Government is expected to make new changes to the 2011 budget for the second time this year under a normative act at the end of next December, cutting another 14.2 billion lek after the budget was cut by 18.3 billion lek (USD 183 million, Euro 130 million) in an effort to keep rising public debt and budget deficit levels in check.
