The Ministry of Finance will spend 556 million euros, which is missing from the state budget next year, to finance the repayment of debt and obligations from the previous period, the capital budget (including financing the construction of the priority section of the highway up to the amount of completed works), budget spending and the creation of reserves. This was officially announced to "Vijesta" from the department headed by Minister Darko Radunović.
RadunovicThe money that is missing from the budget will be provided by the Government through a debt of 187 million euros, from deposits in the amount of 180 million euros and 190 million euros will be taken from the creditor for the highway of the Chinese Exim Bank. Six million euros in income from the privatization of the company is also expected.
"According to the law on the budget for 2019, it was estimated that the missing funds needed to finance the repayment of debt and obligations from the previous period, the financing of the capital budget (including the financing of the construction of the priority section of the highway up to the amount of completed works), the financing of budget spending and the creation of reserves will amount to about 556 million euros. The stated amount of missing funds refers to the financing of the deficit, securities, as well as debt repayment to residents and non-residents," explained the Ministry of Finance.
As it is added, bearing in mind that current revenues are planned to be greater than current expenditures, the deficit and debt repayment will be financed from current revenues. In addition, deposits made in 2018 will be used to finance budgetary needs.
"Budget funds will be used to regulate the mentioned obligations according to the maturity dynamics and the availability of funds in the account, regardless of the source of financing," said the Ministry of Finance.
392 million euros will be spent on paying off the debt from the previous period next year, of which 329,5 million are foreign debts, and 44 million are domestic debts. EUR 95,75 million will be spent on interest, and of that sum, the largest amount of money will go to foreign creditors, EUR 87,3 million, and the rest of EUR 8,3 million is the return of interest in the country.
According to the draft program of economic reforms for the period from next year to 2021, the idea of the executive power is to provide 180 million euros from domestic sources next year through the issuance of domestic bonds.
"In the event that the target value of 180 million is not achieved, the remaining amount would be secured by borrowing from commercial banks. If there is no possibility of borrowing on the domestic market, the missing funds can be provided on the foreign market. When we talk about debt from external sources, it should be emphasized that the debt will refer to withdrawals from the loan concluded with Exim China Bank or other sources for the construction of the Bar-Boljare highway. It is estimated that the financing needs for the construction of the Bar-Boljare highway in 2019 will amount to around 220 million euros. Out of that, the amount of about 190 million euros will be secured by debt with Exim China Bank, while the remaining amount of about 30 million euros of domestic participation will be secured from income or debt on the foreign or domestic market," the government document explained.
The government expects higher revenues from VAT, excise duties, fees, contributions...
Public revenues in the next year are projected at around two billion euros, and the biggest positive deviations compared to this year are expected from VAT, which is 26,8 million euros more, as a result of the growth of economic activity.
13,6 million more is expected from fees next year, primarily from the expected effects of the new law on games of chance, and 11 million euros more is expected from excise taxes.
According to the Draft Program of Economic Reforms, the Government's projection is that next year it will generate 9 million euros more based on contributions, as a result of strengthening fiscal discipline and the expected effects of the law on the reprogramming of tax claims.
"In the period from 2019 to 2021, public revenues will nominally grow, while as a percentage of participation in GDP, they will have a downward trend, bearing in mind that nominal GDP growth is faster than income growth. This trend is a consequence of the strong growth of gross investments, which in the construction phase do not have a significant impact on revenues, while in the operational phase a greater effect on revenue collection is expected," the government document explained.
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