2.4 C
Bucharest
February 3, 2023
ECONOMYFINANCE&BANKING

Romania’s 2023 budget, built on projected government deficit of 4.40% of GDP

Romania’s draft 2023 national budget is built on a projected government deficit of 4.40% of GDP, both cash and ESA, and projected personnel costs of 8.2% of GDP, according to the draft law setting caps on indicators in the tax and budget framework for the year 2023, published by the Ministry of Finance.

“The government, through the Ministry of Finance, has developed a taxation and budgeting strategy for 2023-2025 that establishes the principles, objectives and tax and budget priorities of the government for 2023-2025. The strategy is the substantiating document on which the indicators included in the draft law for the approval of caps on indicators in the tax and budget framework for the year 2023 are projected. For the year 2023, the budget balance is estimated at -4.40% of GDP, and personnel costs at 8.2% of GDP, while for 2024, the budget balance will be -2.95% of GDP, and personnel costs of 7.9% of GDP,” according to the draft’s substantiation note.

For the year 2023, the cap on government debt according to the EU methodology is 49.8% of the Gross Domestic Product, taking into account the potential pre-financing that can be drawn on favourable terms from the financial markets, as well as the possible developments below the expectations of both macroeconomic indicators, as well as financial markets.

The cap is mandatory for the year 2023.

In 2023, reimbursable funding allowed to the administrative and territorial units/subdivisions is RON 1.6 billion lei, and the cap on withdrawals from reimbursable funding contracted or to be contracted by the administrative and territorial units/subdivisions is set at RON billion lei each.

The cap on the issuance of guarantees by the government through the Ministry of Finance, and by the administrative and territorial units/subdivisions in 2023 is set at RON 40 billion.

The basis for building the national budget in the years 2023 and 2024-2025, as well as the downward trend in the government deficit in the medium term, indicate a clear tendency of the gradual elimination of procyclical fiscal policy, and in 2023 fiscal consolidation continues, so that the Romanian government deficit may return to below 3% of GDP in 2024, as provided for in the Maastricht Treaty.

“I can assure you that by mid December, under the timetable discussed, we will have the budget approved by Parliament. The measures under the Support for Romania programme will continue next year. We will also look at other measures we could take to help vulnerable citizens,” PM Nicolae Ciuca stated.

In turn,  Finance minister Adrian Câciu said in a televised interview that the budget based on programmes is a change of both paradigm and approach:

“If this year we’re creating a budget for next year based on programmes, sometime next September we will be able to follow the progress made. If the effects of a given programme are goods, then fine. If they are negative it must be adjusted. It’s a matter of normality, because the money does not belong to the finance minister or the Romanian government, but to the citizens.”

 

Caciu: budget for next year is built on a historic investment volume of 112 billion lei, i.e. 7.2% of the GDP

 

The budget for next year is built on a historic investment volume of 112 billion lei, i.e. 7.2% of the GDP, the Minister of Finance, Adrian Caciu, stated on Tuesday, while participate in a debate with experts in the financial sector.

“Next year’s budget is built on a volume of investments, let’s call it historic. And I must tell you that I really want to see it happening, as we all do in Romania, for we all want to see that the investments we plan in the budget become reality. Therefore, we are speaking of a volume of 112 billion lei, 7.2% of the GDP, while the best and the most important thing is that we invest in the Romanian capital and the Romanian economy. I addressed you with this challenge, the same as the governing programme and everything that we have been discussing politically was meant for this vision of the future. Together, in the economy, we must move from the consumption economy to the production economy (…) The financial part, always facing a crisis, is the one that I could I call it emotional, in the sense that in the world of money, at least, it is easiest to see any challenge that appears in the economic world and beyond. I would start from the fact that there will be no new taxes. There will not be new taxes and that’s what I’ve been saying since the adjustment I made this summer, which consisted in a way in a reduction of some facilities that had reached their potential, on the one hand, but on the other hand caused distortions in the area of investments, in the Romanian economy. Instead, what I can say is that there will be no new taxes, but there will be massive investments, not only from a public perspective,” Caciu said, according to Agerpres.

In the view of the Finance Minister, Romania’s entry into the Schengen Area would bring an increase of 0.5% to the economic growth of the country in the next ten years, while joining the OECD would mean an average increase of 5%, reported to the same period.

According to the high official, the Romanian economy has proven its resilience, and domestic companies are much more competitive.

Romanian business in the new economic context, as well as the economic recovery programmes addressed to companies, are topics that will be addressed, on Tuesday, during the 6th edition of the “Romanian Capital Forum” event.

 

 

 

 

Related posts

IMF mission starts official talks

Nine O' Clock

IB Cargo freight forwarding company, 31 pc growth in 2015

Nine O' Clock

PM Ciuca tours Cernavoda NPP, voices support for the commissioning of units 3 and 4, as well as the retooling of unit 1

NINE O'CLOCK