Budget surplus, down by 0.3 pc in Q1. Wage costs are increasing

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The general consolidated budget registered a surplus of RON 3 billion, 0.4 percent of GDP in the first quarter of this year, down 0.3 percentage points compared with the same period in 2015, Ministry of Public Finances (MFP) announced on Monday.

In the first three months of last year, the consolidated budget stood at RON 4.9 billion, 0.7 percent of GDP.

“General consolidated budget revenues, amounting to RON 55.6 billion, representing 7.3 percent of GDP, were 1.1 percent higher in nominal terms compared to the same period last year. There have been increases over the same period last year at the revenues from: income tax (+ 26.2 percent), tax on use of goods (+ 18 percent), excise (+ 6.2 percent) and contributions insurance (+ 5.2 percent),” MFP notes.

Regarding VAT revenues, these decreased from the same period last year by 1.7 percent, as they were affected both by reducing the standard VAT rate from 24 percent to 20 percent as from January 1, 2016, and the introduction of a reduced rate of 9 percent to food, applied from June 1. 2015.

However, according to MFP, VAT revenues are 1.9 percent above the estimated level for the first quarter of 2016, the increased consumption has significantly offset the VAT cutting.

As regards staff costs, they increased by 8.1 percent over the same period last year, driven mainly by wage increases granted in the second half of 2015 and 12 percent for the personnel in local public institutions, 25 percent for staff in the health public system and personnel from the public system of social assistance, 15 percent for educational staff, 10 percent for staff in the public sector excluding health, education and social assistance, as well as the increase of the gross national minimum wage by RON 75 from July 1, 2015.

Investment expenditures, including capital expenditures as well as those related to development programs financed from internal and external sources were RON 4.4 billion, 0.6 percent of GDP, approximately 29 percent higher than the same period last year, MFP says.


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