Home / BUSINESS / FINANCIAL / Update: Finance Ministry posts draft state budget: 5.5% GDP growth in 2019. Surprise increases for intelligence services

Update: Finance Ministry posts draft state budget: 5.5% GDP growth in 2019. Surprise increases for intelligence services

The state budget for this year is built on a Gross Domestic Product (GDP) of RON 1,022 billion, representing an increase of 5.5% against 2018, an average annual inflation rate of 2.8% and a budget deficit estimated at 2.55 % of GDP (cash) and 2.57% of GDP (ESA), according to the figures posted by the Ministry of Public Finance on its website Thursday evening.

GDP was last year RON 949.6 billion, up by 4.5% as compared to the previous year, and the average annual inflation was 4.63%.

The unemployment rate will drop slightly this year to 3.2%, down from 3.31% in 2018, which means that by the end of 2019, the number of unemployed will be 287,000 people.

The net average earnings will increase to RON 3,085 in 2019, up against RON 2,685 in 2018 and the average number of employees is also estimated to increase to 6.655 million people from 6.525 million in 2018.

The revenues of the general consolidated budget for 2019 are anticipated at RON 341.4 billion, i.e. 33.4% of GDP. The highest revenues are expected from social security contributions –11.5%, VAT – 6.8%, excise duties – 3%, wage taxes and income tax – 2.3% of GDP.

The expenditures in 2019 are estimated at RON 367.5 billion, i.e. 35.9% of GDP. The largest share in GDP is spent on social assistance – estimated at RON 109.8 billion, i.e. 10.7% of GDP (to the same share as in 2018) and personnel expenses – in the amount of RON 102.5 billion (10% of GDP). Expenditures on goods and services are estimated at RON 46.5 billion (4.5% of GDP), up by RON 1.8 billion against 2018.

The Finance Ministry argues the main objectives of the budget for 2019 are to support public investment, education and health.

Investment expenditures – RON 46.8 billion (4.57% of GDP), up by RON 12.5 billion against 2018; the main expenditures provided by the state budget for 2019 concern the National Local Development Programme (RON 2.5 billion), the Public Interest and Social Development Program (RON 1.1 billion); investments by the defense industry operators (RON 200 million), investments in the transport infrastructure (RON 5.6 billion), of which RON 4.1 billion for projects funded by European funds) and water investments (RON 400.000).

Expenditures on public debt are estimated at RON 13.5 billion, have a lower share in the GDP, of 1.3% in 2019, down from 1.4% in 2018.

Other amounts:

  • Health Ministry, budget of RON 9.485 billion (+64.6%);
  • Budget for Education is up by 47% (about RON 9.8 billion);
  • Government debt to reach 35.5%;
  • 2% for Defence Ministry, according to the commitments to NATO;
  • The Ministry for European Funds will register the highest increase in budget, by 183%;
  • The Ministry for Business Environment, Trade and Entrepreneurship – minus 28.9% to RON 652.161 nillion;
  • Economy Ministry – RON 620.356 million (up by 162.9%);
  • Transport Ministry – RON 11.661 billion (+54.9%);
  • Ministry of Labour and Social Justice – RON 25.589 billion, up by 2.1% against 2018;
  • Energy Ministry – RON 250.024 million, down by 13%;
  • Ministry for Communications – RON 261.472 million, down by 20.2%’
  • Economic and Social Council – RON 29.602 million, up by 338.9%;
  • Romanian Intelligence Service (SRI) – budget of RON 2.44 billion (+4.8%)
  • Protection and Guard Service (SPP) – RON 233.801 million (+208%);
  • Special telecommunications Service – RON 604.149 million (+69.5%);
  • Foreign Intelligence Service (SIE) – RON 309.583 million (+8.5%);
  • Presidency – RON 55.42 million (+4.1%).

About Valeriu Lazar