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October 4, 2022

President Iohannis on the draft budget: It is being analyzed by us. When approved, I will express myself

President Klaus Iohannis stated on Thursday in Brussels that the 2018 draft budget is being analyzed by the Presidential Administration, and when it will be approved by the Parliament, he will express himself.

“The budget, as a draft – since we don’t have something else – is being analyzed, and will not express myself on this matter right now, but I will express myself on this matter when the budget will be approved by the Parliament” President Iohannis stated when asked about his opinion on the 2018 budget.

The parliamentary committees started to debate the 2018 state budget on Tuesday, the final voting being scheduled to take place in a joint session of the Parliament, on December 21.

In the last week’s meeting, the Government approved the 2018 draft budget, in which the priorities are health, education and investments.

The Tudose Government estimates a 5.5% increase of the GDP for the next year, up to RON 907.85 billion (Euro 196 billion), according to the draft budget for the next year, a decrease compared to the estimation of the National Prognosis Commission (CNP) for this year, namely 6.1%.

The 2018 draft budget is built on a 5.5% economic growth, a 3.1% average annual inflation, an average exchange rate of RON 4.55 per 1 Euro, and on an average net salary of RON 2,614. The budget deficit (cash) is estimated to 2.97% of the GDP, while the ESA deficit is of 2.96% of the GDP, within the budget deficit target which is below 3% of the GDP, according to the Maastricht Treaty.

The draft budget also establishes the needed resources to grant holiday vouchers for all the employees in the public system, the 9% increase of the minimum and average net salary in the whole economy (public and private sectors), the 10% increase of pensions and the 23% increase of the minimum pension starting from 1st of July, according to the Government. The budget provides the 30% increase of the allowance for people with disabilities starting from 1st of January.

At the same time, RON 4.5 billion have been allocated in the budget for the state aid programs that will start next year.

The budget revenue provided for 2018 is estimated at RON 287.5 billion, namely 31.7% of the GDP. The highest weights in the 2018 budget revenue are given by the social contributions (10.1%), followed by VAT (6.8%), excise duties (3.3%), salary tax and income tax (2.3% of the GDP).

Budget expenditures for 2018 are estimated at RON 314.5 billion, namely 34.6% of the GDP.

At the same time, staff expenditures are estimated at RON 81.2 billion, which means an increase of RON 11.6 billion compared to 2017, in the context of implementing the Framework Law on the remuneration of the staff paid from public funds. Social care expenditure reaches RON 98.6 billion in 2018, namely 10.9% of the GDP.

Expenditures on goods and services will amount to RON 39.9 billion (4.4% of the GDP) in 2018, while the expenditures on government debt are estimated at RON 12.1 billion (1.3% of the GDP), according to the draft. Expenditures on investment in 2018 will be RON 38.5 billion (4.2% of the GDP), increasing by RON 13 billion compared to 2017, according to Government estimations.

The Gov’t wants to spend more money next year for several ministries, especially for the Ministry of Economy, the Culture Ministry, the Ministry of Regional Development and the Ministry of Education, but wants to cut from the budgets of the Labor Ministry and Justice Ministry.

At the same time, the Romanian Intelligence Service (SRI), the Foreign Intelligence Service (SIE), the Protection and Guard Service (SPP) and the Special Telecommunications Service (STS) will have increased budgets next year.


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