In the first two months of 2025, Montenegro recorded a budget deficit of €32.1 million, which represents 0.4% of the projected gross domestic product (GDP), according to the Ministry of Finance’s report.
This figure is €71.4 million better than the planned deficit of €103.5 million, reflecting a stronger-than-expected performance, the Ministry stated.
Budget revenues for the first two months totaled €335 million, accounting for 4.2% of the projected GDP, which is an increase of €3.8 million or 1.2% compared to the same period last year. However, compared to the planned revenues, the budget receipts were €7.6 million or 2.2% lower.
Key categories of budget revenues showed significant growth year-on-year. Corporate income tax revenue amounted to €9.1 million, up by €1.4 million or 18.3% compared to the previous year, although it slightly missed the planned target for the period.
Personal income tax revenue was €11.5 million, an increase of €3.3 million or 40.5% from the same period last year, and a modest rise compared to the plan for the first two months of this year.
Value-added tax (VAT) receipts amounted to €187.1 million, an increase of €13.5 million or 7.8% compared to the same period last year. However, VAT revenues were €4.2 million or 2.2% lower than the planned amount for the period. The acceleration in VAT refunds since the beginning of the year by the Tax Administration had an impact on this trend. VAT refunds for the first two months totaled €22.8 million, €14 million higher than the same period last year. This significantly contributes to improving the business environment and eliminating barriers to business operations.
Excise duties amounted to €49.1 million, which is €4.1 million or 9.2% higher than the same period last year and €1.4 million or 3% higher than planned.
On the other hand, social security contributions totaled €52 million, which represents a decrease of €12.8 million or 19.8% compared to last year, and €2.5 million or 4.6% below the planned amount.
Other revenues were €5.2 million, which is €5.1 million or 49.4% lower than the same period last year. This decrease is attributed to one-time revenues from economic citizenship amounting to €3.1 million and profits from the Central Bank of Montenegro (CBCG) for 2022 totaling €2.6 million, recorded in the same period last year. Nonetheless, the “other revenues” category was 27% above plan.
In February alone, total revenue amounted to €178.3 million, which is €2 million or 1.1% less than in the same month of the previous year. Compared to the February plan, revenues were €8.2 million or 4.4% lower.
Expenditures for the first two months of 2025 totaled €367.2 million, or 4.6% of the projected GDP. Compared to the same period last year, expenditures were €14.9 million or 4.2% higher, largely due to increased mandatory spending. However, expenditures were €79 million or 17.7% lower than planned, reflecting the timing of obligations in this period.
Current expenditures amounted to €136.99 million, which is 83.3% of the planned amount. The shortfall is mainly due to lower spending on maintenance and rents.
Social protection transfers were €176.52 million, or 97.5% of the plan, and represented an increase of €26.42 million or 17.6% compared to the previous year.
Transfers to institutions, individuals, non-governmental, and public sectors totaled €34.06 million, which is €22.05 million or 39.3% lower than planned. It is expected that the spending on these transfers will accelerate in the coming months, in line with the dynamics of obligations being settled.
The capital budget, which includes expenditures for capital investments, was €11.3 million, which is an increase of €1.22 million or 12.1% compared to the same period last year. In February, the capital budget was €11.19 million, reaching 99.1% of the planned amount and reflecting a 31.9% increase compared to the same month last year.
In February, total expenditures amounted to €212.8 million, which is €22.1 million or 9.4% less than planned. The deviation from the plan is largely due to lower-than-expected current expenditures, which amounted to €74.95 million or 88.3% of the planned amount. Additionally, reserves were €210,000, which is €7.84 million below plan. The higher-than-planned reserve was necessary to create conditions for the government’s decision to purchase the Children’s Department of the Institute of Igalo, a process that started in February and was finalized in March.
