Page 138 - SE Outlook Regions 2024

exceeded the planned revenue by 21.2% and was 31.5% higher than in the corresponding period of 2022. This growth can be attributed to increased revenue in almost all budget categories.
Among the notable contributors to the rising revenue was the Value Added Tax (VAT), which accounted for €892.9mn collected by the end of September. This figure surpassed the planned VAT revenue by 12.3% and marked a 18.6% increase compared to the same period last year.
On the expenditure front, the government spent nearly €1.94bn during the first nine months of 2023, equivalent to 31.4% of the estimated GDP. The actual expenses were 5.9% lower than originally planned. However, when compared to the expenditure during the same period in 2022, an increase of 15.8% was observed.
Montenegro’s public debt stood at €3.99bn at the end of September, equalling 60.18% of the projected full-year GDP forecast. Montenegro’s foreign debt was €3.59bn, down from €3.61bn at end-June. China’s Exim Bank, which has lent the country most of the funds needed for the Smokovac-Matesevo highway, remained the largest creditor at the end of September with the debt totalling €711.79mn. Montenegro has asked the EU for help to repay the debt but subsequently gave up a hedging deal, saying it can service the debt without difficulties.
According to the World Bank, Montenegro’s public debt will be around 62.1% of GDP in 2023 and will increase to 66.1% of GDP in 2024.
Montenegro’s internal debt stood at €393.14mn, down from €411.7mn at end-June.
6.9 Budget and debt - Romania
Romania’s public deficit is estimated at 5.9% of GDP in 2023 (versus 4.4% of GDP planned) and the government plans to bring it down to 5% of GDP in 2024. A first fiscal corrective package was already enacted in 2023 but it is scheduled to produce major effects from January 2024. To support the fiscal consolidation in line with the Excessive Deficit Procedure, another package with an impact of 2% of GDP is needed, according to estimates by the International Monetary Fund (IMF).
As of mid-December 2023, the 2024 budget was still subject to adjustments – but the Fiscal Council already said that it expects fiscal slippage (versus the target, but also possibly versus 2023 deficit) unless further corrective measures are taken. Politically, such supplementary corrective measures are going to be difficult.
A major element of the public finances’ sustainability is the new Pension Law, with the major impact on public deficit in 2025 and only partly in 2024 unless the calendar is slightly deferred on technical obstacles. The impact in 2025 is estimated at 3% of GDP.
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