Slight decrease in the budget deficit
Romania's budget deficit decreased in the first 11 months of this year compared to the similar period of 2021.
Ştefan Stoica, 28.12.2022, 14:00
Romania’s general consolidated budget deficit was 4.2% of the GDP in the first 11 months of this year, compared to approximately 3.4% at the end of October. As compared to the similar period of 2021, when it stood at 4.7% of the GDP, the budget deficit decreased by 0.5% in the January-November period, the Finance Ministry officials say. Figures show that the deficit was 58.70 billion lei, i.e. almost 12 billion Euros. The deficit target for the current year is 5.8% of the GDP. The evolution of revenues, the Finance Ministry shows, was mainly influenced by the growth of non-tax revenues, revenues from VAT, of insurance contributions, of additional receipts from energy and European funds.
The expenses of the general consolidated budget amounted to approximately 475 billion lei, increasing by more than 19% as compared to the same period of the previous year. Expressed as a percentage of the Gross Domestic Product, expenses for the 11 months of 2022 registered an increase by 0.5% compared to the same period of 2021, reaching 34% of the GDP. Personnel expenses dominate the expenses chapter, which exceeded 100 billion lei.
On the other hand, inflation and the uncertainties generated by the armed conflict in Ukraine led to an increase in interest payments related to the public debt portfolio. Social assistance expenses also increased, by around 18%, an evolution influenced mainly by the increase, from January 1, 2022, of the pension point by 10% and of the minimum pension, as well as by the granting of financial aid for the pensioners of the public pension system that had pensions smaller than or equal to 1,600 lei. Expenditures on projects financed from non-reimbursable external funds, including subsidies from the European Union related to agriculture, were 31% higher compared to the 11 months of the previous year.
Expenditures for investments, which include capital expenditures, as well as those related to development programs financed from internal and external sources, exceeded 56 billion lei, up by 27% compared to the same period of the previous year. For next year, Romania has a budget based on a 2.8% economic growth rate and a deficit of 4.4% of the gross domestic product. The budget construction is not based on new taxes and is structured on an inflation rate of 9.6%. Money for the protection of the vulnerable categories was also included. Pensioners’ incomes will increase at the beginning of the year due to the increase in the pension point by 12.5% and the granting of various types of support. (LS)
