It seems that the ongoing inflation has been good for the state revenues because rising prices lead to increased revenues from VAT, according to an inflation analysis published in the latest issue of Nova Ekonomija magazine.
The total budget revenue in 2022 stood at 1,915 billion dinars, while in 2021, it was 1,751 billion dinars, which is a 14.6% increase.
Considering that, according to the data collated by the Ministry of Finance, GDP growth in 2022 was only 2.5%, it is clear that budget revenues increased the most not due to the boost in economic activity, but due to the increase in inflation.
Most of the budget revenues came from the collection of VAT (about half of the budget revenue), which has increased by as much as 18.3% compared to 2021.
Year-on-year inflation rose to 15.8% in January 2023.
The prices of the basic foodstuffs, namely milk and dairy products, went up the most by about 50%, followed by meat and meat-based products (20-30%) and certain household cleaners (between 10% and 50%).
(Nova Ekonomija, 17.03.2023)
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