Budget deficit three times higher than in 2017, investment of only 1.7% of GDP

The execution of the consolidated state budget in the first ten months of 2018 has concluded with a budget deficit of RON 20.8 billion, i.e. 2% of the GDP, the Finance Ministry has announced.

In the same period last year the budget deficit was of RON 6.61 billion, i.e. 0.77% of the GDP.

The consolidated state budget revenues have increased by 11.8% against the similar period last year, up to RON 232.2 billion (24.5% of GDP), expenses increased by 18.8% to RON 253.2 billion.

In terms of revenues, important increases were registered in collecting insurance contributions (+37.8%) and non-fiscal revenues (+18.5%).

Since May an improvement in collecting the VAT revenues has been noticed, up by 9% as compared to 2017.

Decreases were registered in collecting wage taxes and revenue taxes by 26.1%, given the cut, as of January 1, 2018 in the level of income tax from 16% to 10%.

In terms of expenditures, a significant increase, of 25.4%, was registered in staff expenses, following the wage increases for state employees. Furthermore, the expenses on goods and services increased by 10.1%, similar to the subsidies (10.4%).

Expenses with social assistance have increased by 12.1%.

During the ten months, the expenses for investments amounted to RON 20.6 billion, by 40.2% higher than in the previous year, i.e. 1.7% of the GDP, of which 0.3% for the Motorways Company.

According to the Finance Ministry, the interest expenses have increased by 25.5% in the first ten months (1.2% of GDP), with a peak of interest payments in October 2018.