First budget revision of 2017 approved by Gov’t

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The Government has approved the first budget revision of 2017, in the Gov’t sitting on Wednesday, maintaining the budget deficit of 2.95 percent of the GDP, according to a release of the Executive .

“The first budget revision for 2017 was approved today in the Government, taking into account an economic growth of 5.8 percent on the first semester, which determined an increase of the GDP by 21.9 billion lei, according to the estimations of the National Prognosis Commission, from 815.2 billion lei to 837.1 billion lei. The revenues of the general consolidated budget increase by 1,060.7 million lei, the expenditures of the general consolidated budget go up 1,705.2 million lei and the budget deficit remains at 2.96 percent of the GDP, according to cash methodology,” the document reveals.

According to the release, all public institutions have fully secured the necessary funds to cover operating expenses.

“Moreover, the budget revision ensures the payment of increased salaries for various categories of public personnel which were approved this year, the extension of granting scholarships to students throughout the academic year, the unfolding of the “Start-up Nation-Romania” Programme for stimulating the establishment of small and medium sized enterprises, starting the selection for state-aid beneficiaries aimed at boosting investments with a major economic impact, the down payment of funds for supporting farmers,” the quoted source mentions.

The Healthcare Ministry was earmarked in addition 431 million lei for the staff payment, mainly medical personnel of the medical units. The funds of the Ministry of Agriculture and Rural Development were increased by 1.8 billion for the schemes of direct payment on area. These amounts will ensure the full down payment for setting up crops in 2018. Furthermore, the co-funding of the projects lodged within the National Rural Development Programme 2014-2020 financed by the EAFRD will also be ensured.

“The Interior Ministry received 1.2 billion lei in addition for ensuring wage rights and military pensions of policemen, ensuring the maintenance in order to keep aircraft operational, the procurement of protection equipment for policemen. The Ministry for Business Environment, Trade and Entrepreneurship, in order to complete the European funds (500 million lei) for the Start-up Nation Programme, received 250 million lei in addition. At the Ministry of Labor and Social Justice 795 million lei were allocated for ensuring pensions and social assistance rights. At the Public Finance Ministry – General Actions, 2,464 million lei were provided for pre-funding from the state budget in case of temporary unavailability of European funds,” the Executive informs.

The release points out that the budget revision doesn’t influence the budget of the National Defence Ministry.

“Budget cuts were mainly operated at the Ministry of Regional Development, Public Administration and European Funds (-1,980 million lei), the Transport Ministry (-6,249.1 million lei), the Communications and Information Society Ministry (-303.4 million lei), mainly from the amounts corresponding to projects funded from European funds, motivated by the late approval of the budget for 2017, delayed by the procurement procedures, which led to a low rate of budget execution for the first eight months of this year. At the ministries where budget cuts of the budget loans were operated, commitment appropriations were not reduced in order not to affect the process of contracting projects financed through European funds and investment works. The cuts concern only budget loans (cash) that can no longer be used in the next 4 months,” the Government informs.

Moreover, also included in the budget of the Public Finance Ministry – General Actions were commitment appropriations worth 638 million lei for the “State aid for funding projects for investments” Programme, in order to start the process of selecting the state aid beneficiaries to boost investments with a major impact on economy.

 

FinMin Misa on budget revision: There is a 1.326 billion euro deficit estimated in the national budget

 

There is an estimated revenue deficit of 1.326 billion lei in the national budget, according to the new budget revision, but there are increases in other budgets, Finance Minister Ionut Misa told the opening of a government meeting on Wednesday.

“The revision has updated the government receipts were updated against the collections during the first seven months of the year, as well as the legislative measures approved so far this year. Thus, some components of the aggregate national budget recorded decreases in revenues, and I can give the example of the national budget with a 1.326 billion deficit, while revenues to other budgets have increased. I can mention here the social security budget, with a surplus of 663.1 million lei; local administration budgets, with a surplus of 1.979 billion lei which gives a total surplus of 1.06 billion lei , thus a positive revision. The aggregate outlays increased by 1.705 billion lei,” Misa said.

He noted that an economic growth of 5.6 percent was predicated for the budget revision.

“The 5.8-percent growth recorded in the first half of the year has led to a positive review of the 2017 economic growth from 5.2 percent projected at the beginning of 2017, to 5.6 percent now. Thus, the nominal value of the GDP [Gross Domestic Product] increased by 21.9 billion lei, from 815.2 billion to 837.1 billion. Given the circumstances, the Government made a positive budget revision while keeping the government deficit at 2.96 percent of the GDP. The aggregate outlays increased by 1.705 billion lei, while the deficit keeps at 2.96 percent of the GDP against the cash methodology,” added the minister.

He also said that the revenues to the aggregate national budget increased by 1.06 billion lei, mentioning that the aggregate national budget consists mainly of the national budget, the local administration budgets, the public social security budgets, the unemployment insurance budget, the budget of the single national healthcare insurance fund, the budget of the institutions fully or partly financed from own revenues, the budget of the national road infrastructure management corporation.

“All these budgets have to be taken into account. The outlays and receipts of the aggregate national budget is computed by aggregating these budgets after eliminating transfers between them, representing the consolidation process. Similarly, the reference indicator and the aggregate government deficit are also determined, ” Misa said.

Under the draft 2017 National Budget Revision Ordinance posted on the website of the Ministry of Public Finance receipts to the 2017 national budget decrease by 1.326 billion lei and outlays by 347.7 million lei, while the deficit is increased by 978.8 million lei.

As far as the aggregate national budget receipts are concerned, they are said to increase by 1.060 billion lei. The outlays from the aggregate national budget increase by 1.705 billion lei, while the consolidated general government deficit, in cash terms, remains at 2.96 percent of the GDP.

The finance minister announced last week that the Ministry of Agriculture, the Interior Ministry, the Presidential Administration, the secret services and the two chambers of Parliament are among the institutions to receive extra money at the current budget revision. On the other hand, the Ministry of Regional Development, Public Administration and European Funds (MDRAPFE), the Ministry of Transport and the Ministry of Communications and Information Society (MCSI) will have their budgets diminished as a result of the revision.