Budget adjustment in the context of the COVID-19 pandemic

budget adjustment in the context of the covid-19 pandemic The Romanian Government has disbursed additional funds to the sectors affected by the coronavirus crisis

The Romanian Government on Wednesday passed an emergency decree operating an adjustment of the state and social security budgets for 2020. The adjustment takes under advisement the latest economic data in the context of the crisis caused by the COVID-19 pandemic. Under the new budget adjustment, additional funds will go to healthcare, labor, public finance, law and public order and public works. The top priority is to secure budget resources to fund the financial assistance measures adopted by the Government in recent weeks. According to the head of the Prime Minister's Office, Ionel Danca, the Government has tripled the funds of the budget scheme guaranteeing loans for working capital and investment addressed to SMEs. Enterprises can get loans at 100% subsidized interest rates, zero interest rate and zero administration fees until the end of the year. On Friday, SME Invest, the biggest support program addressing Romanian SMEs in Romania, is due to kick off. Over 40,000 SMEs will take part in the SME Invest program. This is the only assistance scheme backed by the European Commission at present, Finance Minister Florin Citu has said. The budget adjustment has also provided the necessary funding required to pay technical unemployment benefits to all categories of employees whose employment agreements are suspended right now and for all people whose activity is based on different types of agreements, such as self-employed persons, individual enterprises or other types of professionals, as stipulated by the Civil Code. The healthcare sector was allotted funding both to ensure the necessary amount of medical and sanitary materials and equipment, needed to combat the pandemic, as well as to pay health insurance benefits and other benefits such as medical leaves, Ionel Danca explained. The Romanian official said the budget adjustment factored in all the macroeconomic data submitted by the National Commission for Strategy and Forecast. Ionel Danca:


"According to data issued by the National Commission for Strategy and Forecast, the economy will shrink by 1.9% compared to the original economic growth forecast of 4.1%, based on which the state budget was designed. This means the GDP will shrink by as much as 6% this year. Accordingly, budget allocations were adjusted to reflect the new data regarding the volume of economic activity and estimate revenues for this year, while also taking into account the Government's top priority during this period, which is to ensure the necessary resources to support sanitary efforts aimed at preventing the pandemic from spreading and at the same time to limit the negative economic and social effects of this crisis".


Ionel Danca went on to say that the budget allotted to efforts aimed at combating the pandemic now stands at 3% of the GDP. Previously Finance Minister Florin Citu said the Government is working on a set of major economic recovery measures which will be made public after the state of emergency is lifted.

(Translated by V. Palcu)



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Publicat: 2020-04-16 14:00:00
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