Budget deficit of 1.4% of GDP in five months

The general consolidated state budget ended the first five months of this year with a deficit of 1.4% of Gross Domestic Product (GDP), respectively RON 14.7 billion, the most significant negative balance of the past 8 years.

Given that after the first four months of the year the consolidated state budget deficit was of RON 11.4 billion (1.1% of GDP), it means that in May the negative balance was RON 3.3 billion.

A similar level of the consolidated budget deficit was recorded in the first five months of 2011, when this indicator accounted for 1.36% of GDP, according to the Finance Ministry.

According to data released by the Ministry of Public Finances on Monday, the consolidated general state budget revenues increased by 11.6% in the first five months, and the expenditures recorded an advance of 16.3%.

During January-May 2019, the consolidated general state budget revenues amounted to RON 123.8 billion, i.e. 12% of GDP, compared to 11.7% of GDP in the same period of 2018. As share, the revenues were by 11.6% higher, in nominal terms, as compared to the same period of the previous year.

The amounts from the European Union for the payments made were of RON 6.1 billion.

The expenditures of the general consolidated state budget amounted to RON 138.5 billion, by 16.3% larger than in the same period of the previous year.

The personnel expenditures are by 24.6% higher than in the first five months of 2018, the increase being determined by the wage increases granted under Framework Law no. 153/2017 on the remuneration of staff paid from public funds.

The state budget this year is built on a budget deficit estimated at 2.55% of GDP (cash) and 2.57% of GDP (ESA).

Finance Minister Eugen Teodorovici said on Monday that the projected budget deficit will not be exceeded at the end of the year, rejecting criticism that the deficit in the first five months is very high.