Romania’s public deficit hits 5.2% of GDP in Jan-Aug

Romania's budget deficit rose to RON 54.8 billion (EUR 11.3 bln) in January-August, 2.5 times more than in the same period last year.

Thus, the gap increased to 5.2% of the year's projected GDP from less than 2.1% of GDP in the first eight months of last year.

More than half of the deficit resulted from active measures aimed at mitigating the coronavirus pandemic, the Finance Ministry said.

In August alone, the public budget deficit was RON 5.1 bln (EUR 1.05 bln), or less than 0.5% of GDP - compared to RON 3.8 bln in August 2019.

In the first eight months of the year, the revenues edged down by 1.4% year-on-year to RON 201.3 bln (19% of the year's projected GDP, compared to 19.3% in the same period last year).

The net VAT collections contracted by 15%, or RON 6.2 bln, year-on-year. On the upside, the transfers from the EU budget rose by RON 2.5 bln (+26%), to nearly RON 12.1 bln or 1.1% of GDP (from 0.9% of GDP in the same period last year).

The expenditures rose by 13.3% year-on-year to RON 256.1 bln (24.2% of year's GDP compared to 21.3% in the same period last year).

Social security expenditures surged by 22% year-on-year to RON 91.1 bln, or 8.6% of GDP (35.6% of total public expenditures).

(Photo: Nuthawut Somsuk/ Dreamstime)