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MFP: Budget records deficit in February, negative balance hits 0.51pct of GDP in first two months of 2019

The general consolidated budget recorded deficit in February 2019, given that the first two-month execution sees a RON 5.2 billion (0.51pct of the gross domestic product) deficit, down against the negative balance of RON 5.5 billion (0.58pct of GDP) recorded in last year’s similar period.

In January 2019, the budget saw a surplus of RON 700 million (0.07pct of GDP).

According to data released by the Ministry of Public Finance (MFP) in the first two months of this year the general consolidated budget accounted for RON 46.7 billion, meaning 4.6pct of GDP, as compared to 4.5pct of GDP in 2018. In percentages, the revenues were 10.4pct higher, in nominal terms versus the same period of previous year.

Increases are recorded against the first two months of 2018 when it comes to revenues from excise duties (+22.2pct), insurance contributions (+27pct) and the VAT (+14.1pct). The ministry specifies in context that the collections from social security contributions were influenced by the growth of the number of the employees in economy, of the average gross salary, of the minimum gross salary, and of the new legislative conditions regarding the transfer of the contributions from the employer to the employee, as regulated through the Government Emergency Ordinance (OUG) 79/2017. The revenues from the VAT have grown by 14.1pct as against the collections of the similar period of 2018, reaching RON 10.8 billion.

Moreover, revenues from property taxes and duties increased by 11.3pct.

On the other hand, revenues from wage and income tax dropped 25.2 pct due to the reduction of the income tax rate from 16 to 10 pct beginning January 1, 2018, which reflected in lower collections starting with February 2018.

Amounts from the European Union for payments made stood at RON 2.4 billion.

Spending with the general consolidated budget parked at RON 51.9 billion in the first two months of 2019, 8.6pct higher than the similar period of 2018.

Personnel expenses are 25.2pct higher than those made in the same period of 2018, the growth being determined by the salary increases given in accordance with the Framework Law 153/2017 on public sector wages.

Expenses with goods and services went up by 21.5pct against the reference period, with the Single National Health Insurance Fund and the state budgets posting substantial increases, as well.

Increases by 15.7pct are also recorded in expenses with the interest rates.

Social assistance expenditures have grown against the same period of 2018, by 18pct, mainly being influenced by the 10pct increase of the pension point as of 1 July 2018, thus reaching RON 1,100 from RON 1,000, and also by the increase in the level of the social indemnity for pensioners, from RON 520 to RON 640.

Investment expenditures, including capital expenditures, and those related to development programs financed from internal and external sources stood at RON 1.6 billion.

The general consolidated budget for 2019 is built on a GDP estimated at RON 1,022 billion, with a 2.76pct deficit of GDP.

Last year, the general consolidated budget deficit was 2.88pct of GDP, the same as in 2017.

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