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August 13, 2022

Budget deficit down to 1.15 pc of GDP after seven months

Opinions differ in what concerns the budget rectification. Finance Minister Florin Georgescu believes that “professional” analyses have been made, while PDL points to negative impact on investments.

The general consolidated budget registered a deficit of RON 6.97 bln (1.15 per cent of GDP) after the first seven months of the year, in contrast to a deficit of 1.96 per cent of GDP in the similar period last year and of 1.12 per cent of GDP after the first half of this year, a press communiqué shows. Compared to the first seven months of 2011, the budget deficit is smaller by RON 4.3 bln.
We remind our readers that the government took the commitment in its agreement with the IMF to lower the budget deficit from 4.3 per cent of GDP in 2011 to 2.2 per cent of GDP this year.
Budget revenues totaled RON 110.4 bln (18.2 per cent of GDP) at the end of August, registering an 8 per cent year-on-year growth in nominal terms and a 0.5 per cent growth as a share of GDP. Likewise, expenditures grew by 3.4 per cent to RON 117.3 bln (19.3 per cent of GDP), while their share in the GDP dropped by 0.3 per cent. Earmarking hikes were registered mainly when it comes to projects financed with EU funds (+44.2 per cent compared to 2011), interest rates (-26.5 per cent), goods and services (-7.6 per cent). Investment expenditures, which include capital expenditures, as well as expenditures on development programmes financed from internal and external sources, totaled RON 17.4 bln (2.9 per cent of GDP), up by 8.1 per cent year-on-year in nominal terms.
Concerning the budget rectification, Finance Minister Florin Georgescu stated on Thursday that “professional” analyses were made before reallocating money from some ministries and in his opinion all ministers were satisfied because “they left smiling” and “no screams were heard” in the government’s meeting room.
On the other hand, in a statement for RFI, PDL MEP Theodor Stolojan pointed out that the budget rectification shows “the deterioration of the economic situation in Romania” reflected through the economic growth slowdown, the economic growth rhythm being small as it was. He believes that the ministers were smiling because “they are yet to realize what this means.” “You know many people smile without a reason” he added. “Given an inflation hike from 3 to 3.5 per cent, a depreciation of the exchange rate, all these things are not positive signals,” he concluded.
In his turn, PDL President Vasile Blaga pointed out on Friday in Zalau that the political crisis has to end since the Constitutional Court has made a ruling on the referendum and solutions have to be found for Romania, especially since Thursday’s budget rectification has cut “the little investments still left, Mediafax reports.” “For the first time in four years we’ve contributed to the European budget EUR 60 M more than we absorbed from it. It’s an extremely serious thing for the economy. In the following weeks we will focus exactly on these issues. We believe that the politicians have to stop digging trenches, it’s time to build,” Blaga stated. PDL First Vice President Cezar Preda stated during the same press conference that Thursday’s budget rectification in which money from investments were taken in order to pay pensions and salaries represents an unbelievable step that no Romanian politician took in the last five years.
Development Ministry’s budget cut, priority programmes not affected
The Development Ministry’s budget was cut by RON 223 M to RON 1.979 bln, but priority programmes such as ANL housing, thermal rehabilitation, National Investment Company (CNI) programmes and water-sewerage works are not affected, the institution informs. The ministry did not point out which projects are no longer financed as a result of the RON 223 M cut.
At the same time, the institution announced that it has found the budget resources needed to finance the investment backlog in Brasov, so that next year’s European Youth’s Olympic Festival will be organized.

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