RO budget revision brings deficit-to-GDP ratio marginally down to 7.13%

The Romanian Ministry of Finance posted for public debate the project for revising the central government and social security budgets, based on assumptions for 7% GDP growth compared to 4.3% expected in February when the first budget planning was drafted.

The general government budget revenues and expenditures are revised upward by 4.2% each (to RON 380.5 bln and 463.7 bln respectively), resulting in a deficit of RON 83.2 bln (EUR 16.9 bln) or RON 3.2 bln (4%) more compared to the initial budget planning, Economica.net reported.

The revenues to GDP ratio (already low in absolute terms) deteriorate from 32.7% to 32.4%.

The increase in both revenues and expenditures is less than proportional to the 5.2% higher (nominal terms) under the updated projection.

The 5.2% upward revision of the nominal GDP (to RON 1,179.4 bln or EUR 238.8 bln) is somewhat cautious, particularly because the GDP deflator will exceed the 4% estimate, which will allow the Government to distribute more funds in the second budget revision already announced for November.

As for the second revision unveiled by the Government, the central Government budget revenues increase by RON 6.4 bln, of which VAT revenues increase by RON 3.2 bln, and excise duties by RON 1.5 bln.

Central Government budget expenditures increase by RON 9.9 bln, of which expenditures on goods and services by RON 1.6 bln; transfers between public administration units by RON 1.5 bln, and other transfers, which are not specified, by RON 2.2 bln.

The Health Ministry receives an additional RON 3.7 bln, of which RON 1.9 bln for the fight against COVID-19, according to Ziarul Financiar. The Ministry of Finance has an additional RON 3 bln, the ministry of development receives RON 2.2 bln more, of which RON 2 bln for the National Local Development Program (PNDL).

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