PM Tudose: Gov’t will approve 2018 national budget in 2018 built on 5.5-pct economic growth projection

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The Government will approve the 2018 national budget on Wednesday that has been built on a projection of a 5.5-percent economic growth, according to Prime Minister Mihai Tudose.

“It is obvious that the most important item today is the approval of the national budget, one of the most important pieces of legislation issued by the Government. Despite all the criticisms and doomsayers, it is a good project in a good year, based on figures that are not optimistic, but less then pessimistic, I would say, because we are considering an economic growth of only 5.5 percent, given that everyone is predicting an even higher Gross Domestic Product (GDP) growth. The budget is projecting government receipts by 30.9 billion lei higher than in 2017; it is the for the first time that Romania’s GDP exceeds 200 billion euros,” Tudose said at the opening of the meeting.

He added that the Government remains consistent with its priorities, such as healthcare, education and infrastructure.

“The rises are 17 percent in healthcare spending; 16 percent percent in education, and 42 percent in investment, all of which adds up to a 42-percent increase over 2017. We have also allocated an additional 23.6 percent for the budget of the Agriculture Ministry, as agriculture is one of the main engines for growth this year; once again, I want to thank you for your efforts,” added Tudose.

The Government’s target for the absorption of European funds in 2018, he said, is 28.4 billion lei.

“With such a realistic goal, I think we will outperform it next year, given everything that has been done this year, everything that has worked on will come to maturity. It will be the Year of the Centennial [of the December 1, 1918 Greater Union] there are budgeted amounts and projects (…),” said Tudose.

 

Gov’t passes draft 2018 national budget, prioritises healthcare, education, investment

 

The Government on Wednesday passed a draft of the 2018 national budget that prioritises spending on healthcare, education and investment.

According to a press statement released by the Government, the draft 2018 budget is built on a projection of a 5.5-percent economic growth, average annual inflation of 3.1 percent, an average exchange rate of 4.55 lei to the euro and a net average monthly wage income of 2,614 lei.

“The cash budget deficit is estimated at 2.97 percent of the Gross Domestic Product (GDP), while the ESA deficit is projected at 2.96 percent of GDP, with government deficit to be kept at below 3 percent of GDP, in line with the Maastricht Treaty provisions,” according to the statement.

Under the draft, government’s receipts are estimated at 287.5 billion lei, by 30.9 billion lei higher than in 2017, being for the first time that Romania’s GDP is expected to pass the 200-billion-euro mark.

“Out of the 30.9 billion lei worth of additional revenue, 21.1 billion lei will go to the healthcare spending, which will increase by 17 percent over 2017; the education spending, which will grow by 16 percent, and also to investment spending, which will see a 42-percent increase.”

At the same time, the draft budget secures the necessary resources for granting holiday vouchers to all public workers, increasing by 9 percent the net minimum and average wages, both in the public and the private sectors, increasing by 10 percent public pensions from July 1 and the minimum pension by 23 percent.

As far as people with disabilities are concerned, the budget provides for an increase by 30 percent in their monthly allowances from January 1.

According to the press statement, one of the government’s main goals for 2018 is to reduce unemployment to below 4 percent and to increase the number of full-time employees by over 200,000.

“In this respect, the government will support the development of the Start-Up Nation programme for another 10,000 companies, mainly owned by young people. At the same time, 4.5 billion lei of the national budget is set aside for state aid programmes that will start next year, which include projects to increase Romania’s exports by about 7.6 percent. ”

The Romanian Government also says that it is meeting its commitments to Romania’s NATO allies by allocating for the second consecutive year 2 percent of the GDP for defence spending and 53 million lei for an increase in the equity of defence companies; as far as the absorption of European funds goes, the Romanian Government has set to draw 28.4 billion lei (6.3 billion euros) in 2018, up 32 percent from 2017.

Government outlays in 2018 are estimated at 314.5 billion lei, which is 34.6 percent of the GDP.

The draft national budget and the draft social security budget for 2018 will be submitted to Parliament for consideration and adoption.

 

Gov’t: Uniform Public Pay Law supplemented and amended; it aims medical and teaching staff

 

The Gov’t approved on Wednesday’s sitting an Emergency Ordinance draft to amend and supplement the Framework Law No.153/2017 on the wages of personnel paid out of public funds and a part of the amendments that were brought are aimed at the sanitary system and teaching staff.

According to a release of the Executive, the personnel of the sanitary system who benefited in 2017 from meal tickets will benefit from food entitlement throughout 2018, and this benefit will be exempted in 2018 when setting out the 30 percent bonus limit.

In respect to the education area, the new normative act regulates the manner in which it will be enforced the payment system by the hour or by cumulation for the teaching, management, guidance and control education staff, under an order of the National Education Minister.

“Moreover, in order to avoid salary cuts following the new measures according to which social contributions will be shifted from employer to employee, the Government approved the granting, as of 1 January, 2018, of a salary increase of 28.5 percent compared to the level granted in December 2017, for the staff who is paid from public funds benefiting from the income tax exemption on 31 December 2017, according to the Law No. 227/2015 regarding the Tax Code, with the subsequent amendments and additions. The other personnel categories will benefit from a salary increase of 25 percent, starting 1 January 2018, compared to the level granted in December 2017,” according to the release.

“The document adopted by the Government also has in mind the incentive of personnel managing community funds, by establishing salary increases of up to 35 percent, compared to a maximum of 25 percent, as it is currently stipulated in the law. This increase will be granted based on criteria established through the framework-regulation drawn up by the Regional Development, Public Administration and European Funds Ministry (MDRAPFE) and approved under a Government decision. In respect to the food benefit, it will be granted monthly, in an amount representing the 12th part of the country’s two minimum gross salaries guaranteed in payment,” the press release mentions.

The Gov’t also mentions that under the OGU some basic salaries have been corrected in order to observe the correlation between positions.