The 2024 budget bill

The 2024 budget bill to reach Parliament for debate, with a vote expected to take place next week.

Mihai Pelin, 14.12.2023, 14:00

The 2024 budget bill is up-to-date and focused
on current priorities and needs, says finance minister Marcel Boloş, while stressing
the need for a cautious fiscal and budgetary policy. The draft budget provides
for the salary rises announced by the government for some time, namely a 5%
rise for public sector employees with the exception of education employees, who
will benefit from a 20% rise in two stages (from 1st January and 1st
June, respectively), and a 13.8% rise in pensions, with the promise that all
pensions will be recalculated in keeping with the new law at a later date. The
monthly average net salary is now around 950 euros.

Also in the public sector, competitions to
occupy vacant posts will be suspended and all extra-work will be rewarded with days
off. The budget bill is based on a 3.4% economic growth rate, a 5% deficit of
GDP and an average annual inflation rate of 6%. The revenues of the general
consolidated budget are expected to reach around 118 billion euros, accounting
for 33.8% of GDP, while the expenditure is estimated at some 135 billion euros,
namely 38.8% of GDP. The budget bill also contains most of the measures
included in the fiscal package for which the government assumed responsibility
in Parliament. These include a minimum tax on turnover, additional taxes on
lending institutions and taxes for oil and gas companies, curbing tax reliefs
for the IT, building, agricultural and food industry sectors and raising the
VAT from 5% to 19% on foods with a high content of sugar and passenger
transport for tourist and leisure purposes. Other measures refer to the
reduction of management positions, the elimination of vacant posts and granting
holiday and meal vouchers only to public sector employees earning less than
1,600 euros a month.

The opposition has criticised the budget bill,
with the Save Romania Union and the Alliance for the Union of Romanians saying
the budget deficit will pass the 5% figure estimated by the government, with
the former expecting it to exceed 7% and the latter putting the deficit at
6-7%. (CM)