March 8 (SeeNews) - Montenegro's government has said it plans to propose to increase the deficit in this year's state budget to 139.14 million euro ($172.1 million), equivalent to 3.16% of the estimated gross domestic product (GDP).
A deficit equivalent to 2.6% of GDP is envisaged in the budget adopted in December.
The change will reflect the government's plans to refinance debt under more favourable conditions, given the positive stance of the financial markets towards Montenegro, the government said in a statement on Wednesday.
The adjustment envisages an increase of 57 million euro in the budget revenues and a 82 million euro rise in expenses.
On the expenditure side, a cost of 70 million euro is planned for the purchase of part of the shares of power supplier Elektroprivreda Crne Gore (EPCG), 6.5 million euro for the repayment of debt of flag carrier Montenegro Airlines, 500,000 euro for the promotional activities of the National Tourist Organisation and 4 million euro for the implementation of public administration reform.
The projected revenue from value-added tax was increased by 10 million euro, while the expected corporate tax revenue was increased by 2 million euro. The forecast revenue from real estate tax was reduced by 1.6 million euro.
Montenegro's parliament adopted the 2018 state budget in December. The budget, built on projections of economic growth of 3.0% in 2018, envisages revenues of 1.705 billion euro and expenses of 1.821 billion euro.
The Montenegrin government plans to borrow 158.8 million euro next year, including a 15 million euro loan from the Council of Europe Development Bank (CEB) for the construction of a prison in Bijelo Polje, a 40 million euro loan from the European Investment Bank (EIB) for the reconstruction of roads and a 6 million euro loan from the International Bank for Reconstruction and Development (IBRD) for energy efficiency projects, the parliament said back then.
Montenegro's finance minister Darko Radunovic said in December the government expects to close 2017 with budget deficit equivalent to 3.7% of the estimated GDP. Budget revenues were expected to exceed plan by 30 million euro in 2017, rising by 90 million euro above 2016 level, while expenses were projected to be 50 million euro lower year-on-year, Radunovic said at the time.
($ = 0.808328 euro)