The first budget rectification for 2017 was approved on Wednesday by the Government, given the 5.8% economic growth in H1, which has led to a GDP growth of RON 21.9 billion, according to the National prognosis Commission, up from RON 815.2 billion to RON 837.1 billion.
The consolidated state budget revenues will increase by RON 1.06 billion, the expenditures by RON 1.7 billion, with a budget deficit at 2.96% of the GDP, according to the cash methodology, a government release reads, ziare.com informs.
The Government says all public institutions have the necessary funds ensured to cover the functioning expenditures.
PM Mihai Tudose has asked Finance Minister Ionut Misa to explain the positive budgetary rectification, as this is the “most important topic on the agenda” and it is needed “by the colleagues and by the nation, through the media.”
Fiscal Council says vulnerabilities over medium term found
The Fiscal Council has sent on opinion about the draft budget rectification saying several issues which would increase the vulnerability of public finances have been found, given the large deviations from the medium term objective, hotnews.ro informs.
“The economic growth above expectations was not enough to ensure the convergence of fiscal revenues with the targets, as expected, and the initial assessments on the needed current expenditures (under-dimensioning of the expenditures seen by the Fiscal Council) have been seriously exceeded during the budget execution. Avoiding exceeding the deficit ceiling is accomplishable only following important cuts in public investments against the scheduled level, reversing the tax cuts completed before and of discretionary supplementary measures in terms of revenues as well as extraordinary dividends from state owned companies. The above elements determine the Fiscal Council to recommend to the Government the urgent elaboration of a plan of measures for the coming years with a view to re-budgeting the budget deficit on a convergent path on the medium-term objective, as called both by the LRFB and by the European treaties to which Romania is signatory,” the document released by the Fiscal Council reads.