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Bucharest
November 30, 2021
BUSINESS

Gov’t adopts the second budget rectification

The draft is based on economy shrinking by 8.46 pc in 2009, a GDP of RON 497.3 bln and an inflation rate at 4.3 pc.

Government adopted during the meeting on Saturday the second budget rectification in 2009, which includes a deficit of the general consolidated budget at 7.3 per cent of the gross domestic product (GDP), compared to a previous level of 4.6 per cent, according to the announcement made at Victoria Palace by Public Finances Minister, Gheorghe Pogea, cited by Agerpres.


The budget rectification is based on an economic negative growth of 8.46 per cent in 2009, GDP amounting to RON 497.3 bln and an inflation rate at 4.3 per cent. Because of the adverse macro-economic framework, the budgetary deficit was raised from initially RON 24.3 bln to RON 35.6 bln.


According to the Finance Minister, the revenues to the budget in 2009 are expected to amount to RON 157.2 bln or 31.6 per cent of GDP, and the budgetary expenditures – to RON 193.7 bln or 38.9 per cent of GDP. Against a higher than anticipated economic contraction, budget revenues are estimated to decrease by RON 17.4 bln in 2009, because of declining VAT revenues by RON 4 bln, declining revenues from social contributions by RON 4.29 bln, lower non fiscal revenues by RON 4.19 bln, whereas the drawings of post-accession European funds are estimated to decline by RON 500 M.


According to Pogea, the expenditures to the general consolidated budget were reduced by RON 5.25 bln (1.1 per cent of GDP), whereas the expenditures of the state budget were raised by RON 5 bln, those of the social insurance budget by RON 487 M, and those for unemployment by RON 875 M.


In terms of budget expenditures, for public investments, additional RON 900 M were earmarked for infrastructure projects, out of which RON 500 M for road infrastructure, RON 400 M for local infrastructure – county roads and schools.


The public guarantee level was raised in 2009 by EUR 400 M, an amount mainly used to secure continuous co-financing for European projects and projects using non refundable funds. Also in terms of public investments, RON 303 M was earmarked to Ministry of Administration and Internal Affairs (MAI) for the integrated security system of the state border. Regarding social assistance, MFP official mentioned the raise of the pension and the unemployment budget, as well as RON 5.5 bln earmarked from the state budget to the pension budget.


The cuts in funds for ministries amount to ron 1.4 bln


With the purpose of reducing the volume of non receivables, RON 365 M were earmarked for CFR Calatori to be used for settling the liabilities due to the utility suppliers and to other businesses as well as RON 330 M for local budgets for the payment of utilities. Pogea said that the budgetary rectification includes the savings at salaries – 15.5 per cent on monthly basis – resulting from the 10 days of unpaid leave for civil servants. With these cuts included, the budgets of several Ministries were adjusted downwardly.


In total, the cuts in funds for Ministries amount to RON 1.4 bln, as follows: Ministry of Regional Development – RON 347 M, Ministry of Education and Research – RON 154 M, MFP – RON 205 M, Ministry of Health – RON 113 M, Ministry of Environment – RON 108 M, Ministry of Youth and Sport – RON 78 M, Ministry of Communications – RON 43 M, Ministry of Tourism – RON 30 M.


Government General Secretariat will get RON 66 M less following rectification; other main budget applicants have budgets lower by RON 151 M in total.

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