The draft budget for the year 2020 is built on an economic growth of 4.1 pct, a budget deficit of 3.59 pct and an average inflation rate of 3.1 pct, according to the Report on the macroeconomic situation on 2020 and its projection on years 2021-2023 published on Tuesday morning on the website of the Ministry of Public Finances (MFP).
The income mentioned for 2020 stands at 360,149 billion lei, with a share of the GDP of 31.89 pct, while expenses are estimated at 400.694 billion lei, namely 35.48 of the GDP.
The cash budget deficit target for 2020 is estimated at 3.59 pct of the GDP (40.545 billion lei), while the ESA deficit is estimated at 3.58 of the GDP, to reach 1.94 pct in 2023, thus fitting in with the provisions of the European regulations.
The current account deficit is forecast at 10.6 billion euro in 2020, having a share in the GDP that dropped as compared to the previous year, namely 4.5 pct, with a trade balance deficit of 7.7 pct of the GDP.
The Gross Domestic Product in current prices is estimated at 1,129.2 billion RON for 2020, increasing compared to the value of 1,040.8 billion lei reported for this year.
“Investments are the motor of economic growth and job creation, with a multiplying effect and a direct participation in the gross formation of fixed capital. For the year 2020 investments are estimated at 4.5 pct of the GDP, an increase of 6.3 billion lei over the year 2019,” the draft shows.
The average gross wage has a value of 5,429 RON in 2020, and the net wage stands at 3,324 RON. The unemployment rate in 2020 is estimated at 3 pct, compared to 3.2 pct in 2019, and the number of unemployed persons stands at 275,000.
An increase in the number of employees by 1.9 pct is expected concomitantly with the reduction of the unemployment rate recorded at 3.0 pct at the end of 2020.
For the year 2020, it is estimated that inflation will be reduced as a yearly average down to 3.1 pct, as well as to 3.0 pct by the end of the year.
The measures that underpinned the budget construction for the 2020-2023 horizon were: eliminating the mechanism for the individual payment of the VAT in view of making it compatible with the community acquis in the domain; the forced execution of sums existent in the VAT account will be applied appropriately by credit institutions, up to the limit of the total amount of budget obligations, as it is individualized in the address establishing the lien.
In 2020, 2 pct of the GDP is ensured for defence.
President Iohannis: The budget is very good, Gov’t assuming responsibility on it – feasible option
The budget for next year is very good, providing for the necessary amounts in all respects, and the option of the Government assuming responsibility on the bill is feasible, said on Tuesday President Klaus Iohannis.
“If the Government decides to promote the budget, for example, for timeline reasons, through the procedure of assuming responsibility in front of Parliament, it seems like a feasible option,” said the President at the Cotroceni Presidential Palace.
He mentioned that the budget “allows for the continuation of a positive policy as far as wages and pensions are concerned.”
“It’s a good budget, it’s a budget that provides for the necessary amounts in all respects, and I believe it will be a budget that can allow for the rate of economic growth to be maintained. This is very important,” the head of state showed.
PM Orban: If everything goes well with budget execution, Education will be a priority in getting more money
Prime Minister Ludovic Orban stated on Tuesday that the allotments from the state budget for next year will allow the support of Education, while ensuring thus the implementation of the governing programme, and also that, if everything goes well with budget execution until rectification, besides investment, the Education will be treated as a priority field to receive additional money.
“We have built a budget for next year that is solid, a budget with a deficit below the one caused by the PSD (Social Democratic Party) in 2019 and a budget that will be able to support all the expenditures to be generated by the in force legislation. (…) Because we have a budget that needs to cover for the increase in pensions stipulated by the Pension Law, which means an additional 16 billion lei to be spent from the state budget. (…) So, given these constraints, which are related to the limited resources we have at our disposal for the many expenditures generated by the laws previously adopted by the PSD government, I believe that allotments that we’ve made are possible and will allow us to also support Education and, especially, to ensure the implementation of our governing programme. Not last, most definitely, if we succeed with the budget execution until the budget rectification, besides investments, Education will be a priority in getting additional money,” said Orban, asked if 2.7 per cent of the GDP for Education is enough for next year.
He added that, for PNL, Education is a priority.
In his opinion, the own revenues of the universities also could increase next year, through both the involvement in projects to receive European funds and the development of research.
Ludovic Orban participated on Tuesday, at the National Children’s Palace, in the award ceremony for the Romanian pupils who got very good results in the international Olympiads