Ialomitianu’s 2012 priority – public investment

Starting this spring, the government will afford a few relaxation measures, but not of a fiscal nature, Finance Minister Gheorghe Ialomitianu stated in an interview for the ‘Capital’ magazine. Also, companies looking forward to a reduction of social security contributions, VAT or other taxes and dues still have to wait. He thinks the reduction of taxation should be postponed this year and that more beneficial for the economy than the investment private operators can make with money left to their disposal by the state would be the money the government spends on development. But Ialomitianu has good news for the beneficiaries of public investment which is set to go up if the April budget execution is positive, as well as the retired people and employees of the state who may obtain a rise of income, the minister notes.

However, economic growth prognoses are prudent to a certain extent, as many international bodies have revised theirs. ‘We took a prudent approach to the drafting of the budget and we considered a growth by 2.1 per cent. But we count on a number of things, first of all investment: RON 38 bln compared to RON 36 in 2011, mainly in the sectors of infrastructure and construction we are heavily relying on this year and that will make an important contribution to the GDP performance in 2012 if managed right, in my view,’ the minister of finance explained. He expects an even bigger economic growth in 2013. ‘If money is allocated for investment, expenditures do not need to decrease. We need a budget surplus at times of economic growth so that we can help the business environment when the economic activity slows down instead of adjusting expenditures and, by that, hurting consumption,’ Ialomitianu further explained.
As for the repayment of the IMF loan beginning this year, the minister doesn’t expect any issues with that or with the financing, even under conditions of derailment on financial markets, ‘because we have money put aside at the IMF and European Commission, which can be used to repay loans should we encounter any financing difficulties.’

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