Budget deficit up to RON 5.5bn in Q1

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The execution of the consolidated state budget in the first quarter 2019 concluded with a deficit of RON 5.5 billion, i.e. 0.54% of GDP, against a deficit of RON 4.46 billion (0.48% of GDP) in the similar period last year, the figures released on Thursday by the Finance Ministry read.

In the previous month, the consolidated state budget registered a deficit of RON 5.2 billion (0.51% of GDP).

The revenues of the consolidated state budget amounted to RON 74.7 billion, i.e. 7.3% of the GDP, against 7% of GDP in 2018. As share, the revenues were by 12.5% larger in nominal terms against the same period last year.

Increases were registered against Q1 2018 in revenues from insurance contributions (+21.9%), excise duties (16.8%) and VAT (+14.8%).

The Finance Ministry stressed that the revenues from insurance contributions were influenced by the increase in number of employees, by the increase of the gross average wage, of the minimum wage, but also by the new legal conditions on the transfer of contributions from the employer to employee, regulated by GEO 79/2017. The revenues increased by 14.8% against the same period in 2018, reaching RON 15.3 billion.

The receipts from taxes and property tax have increased by 8%. Decreases in revenues were registered in terms of income taxes by 16%, given the reduction, since January 1, 2018, of the level of the income tax from 16% to 10%, which was reflected in the revenues since February 2018.

The amounts collected from the European Union for the payments made were of RON 3.8 billion.

The expenses of the consolidated state budget amounted to RON 80.2 billion, by 13.2% higher than in the same period last year.

Staff expenditures increased by 25.7% against Q1 2018, due to the wage increases according to Law 153/2017 on wages paid from public funds.

The expenditures on goods and services increased by 18% against Q1 2018, with significant increases of the national sole fund of health social security insurance and also of the state budget’s.

Expenses on interest rates have increased by 15.5%.

The expenses on social assistance increased against Q1 2018 by 15%, mainly due to the increase of the pension point by 10% since July 1, 2018, up from RON 1,000 to RON 1,100 and of the social indemnity for pensioners from RON 520 to RON 640.

Investment expenses, including capital expenses, and those for development programmes funded by internal and external sources, were of RON 4.9 billion.

The 2019 state budget is built on an estimated budget deficit of 2.55% of GDP (cash) and 2.57% of GDP (ESA).

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