Consolidated state budget deficit up to 2.88pc of GDP in 2017, Finance Ministry says

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The consolidated general state budget deficit has climbed to RON 24.3 billion, meaning 2.88% of the GDP, i.e. 2.3 times larger against the level registered last year in 11 months of RON 10.2 billion (1.21% of GDP), the Ministry of Public Finances (MFP) informs on Friday.

As compared to 2016, the consolidated state budget deficit has grown by approx. 32.5%, from RON 18.304 billion (2.40% of GDP) to RON 24.3 billion, below the year’s target set at 2.96% of GDP, MFP informs.

“The execution of the consolidated state budget deficit, based on the operative figures in 2017, has concluded with a deficit of RON 24.3 billion, meaning 2.88% of the GDP, below the annual target set at 2.96% of GDP,” MFP further says.

The revenues of the consolidated state budget amounted to RON 251.8 billion, i.e. 29.9% of GDP, against 29.4% of GDP in 2016, whereas as percentage, the revenues were by 12.5% higher in nominal terms against the previous year.

Also, the revenues collected on the main four budgets of the consolidated general budget, namely the state budget, the state social insurance budget, the unemployment insurance budget, the budget of the single national health insurance fund, collected by the National Agency for Fiscal Administration (ANAF ) accounted for 100.3% of the revenues managed by the Tax Administration.

Overall, in 2017 there were increases against the previous year, for the collection of social contributions (by RON 10.4 billion, 17% respectively) for the income and revenue tax (by RON 2.4 billion, +8.6%) and for non-tax revenues, which were by RON 3.8 billion higher than in 2016 (+21.1%).

On the other hand, the receipts from taxes and property taxes declined by 9.1% as compared to 2016, MFP specifying that the decrease was mainly determined by the elimination of the tax on special constructions on January 1, 2017.

At the same time, the receipts from other taxes and duties on goods and services increased by 38.1% in 2017 as compared to the previous year, the increase being mainly determined by the evolution of receipts related to the contribution due for medicines, as well as for contracts volume cost/cost-volume-result financed from the budget of the Single National Health Insurance Fund.

Regarding the VAT revenues, the MFP figures show that last year there was an increase of 3.6% “mainly due to the revenues in the second half of the year, given the measures of cutting the standard VAT rate from 24% to 20% on January 1, 2016, reflected in the February 2016 receipts, and the VAT rate cut from 20% to 19% in February 2017.”

In addition, the amounts from the European Union (EU) to the payments made amount to RON 17.1 billion.

At the level of last year, the expenditures of the consolidated general state budget, amounting to RON 276.1 billion, increased by 14% in nominal terms as compared to 2016, while the personnel costs increased by 22%.

The expenditures on goods and services and subsidies decreased by 0.7% and 6.1% respectively as compared to 2016, but the social assistance expenditures increased by 13.1%, “being mainly influenced by the increase by 5.25% of the retirement point from January 1, 2017 to RON 917.5 and by 9% from July 1, 2017 of the pension point to RON 1,000 as well as the measures approved during 2016 that helped increase social spending, increase and modify how to set a monthly childcare allowance and the insertion incentive.”

According to the MFP figures, the investment expenditures, including capital expenditures, as well as those related to the development programmes financed from domestic and foreign sources, amounted to RON 26.7 billion, i.e. 3.2% of GDP.

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