ECONOMY

PM Ciolos: Budget building conducted under set of constraints imposed by legislation adopted by Parliament in 2015

Prime Minister Dacian Ciolos said on Wednesday that the 2016 budget was built considering a set of constraints imposed by the legislation adopted by Parliament, which prompted a rise in expenditure at around 12.6 billion lei.

“There have been all kind of opinions these days relating the manner in which the Government should have tackled this legislation or not, these decisions that have a significant budgetary impact, opinions saying that the Government was allegedly frightened or proved cowardice by the fact it did not decide to reject certain proposals, possibly reject them by an urgent order. /…/ The Government decided to respect this legislation adopted by Parliament and to rather prove courage by taking upon ourselves the wisdom to search for solutions so as to apply this budget”, the prime minister said at a news conference at Victoria Palace .

According to Ciolos, the Government next year will create the prerequisites for meeting the agreed limits of the structural deficit on the medium-term.


State, social security budget plans sent Parliament for urgent passage

The 2016 state and social security budget plans adopted by the Government will be sent Parliament on Wednesday, with the request to be debated and passed by an urgent procedure, the executive has said in a release to Agerpres.

The general consolidated budget revenues are put at 231.1 billion lei, accounting for 31 percent of GDP, the general consolidated budget expenditure is estimated at 252 billion lei (33.8pct of GDP), and the (cash) budget deficit is anticipated at 2.8 percent of GDP next year, thus equalling ESA deficit of 2.95 percent of GDP and a structural deficit of 2.73 percent of GDP.

The Romanian economy is estimated to grow 4.1 percent next year, amid the implementation of the economic stimulus measures included in the new Tax Code as well as 3.5 percent increase in the average number of employees, while at the same time cutting the unemployment rate to 4.8 percent by end-2016 down from 5.1 percent at the end of this year.

The gross average salary earning in the economy will go up by 7.2 percent, which sets the prerequisites for a 6.6 percent rise in the real salary earning in the economy, the release said.

The estimation of the general consolidated budget expenditure took into consideration the impact of the measures adopted by the Government and Parliament this year, which will have as an effect a rise in the budget expenditure at around 13 billion lei. Also considered was 5 percent increase in the pension basic grade from Jan. 1, 2016.

Health expenditure amounting to 31.2 billion lei or 4.2 percent of GDP was included in building the general consolidated budget, by 3.1 billion lei more than in 2015 and by 4.5 billion lei higher than in 2014.

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