Romanian Government revises budget upwards, adds EUR 305 mln to expenditures

Romania’s consolidated state budget will be revised upwards, with health, defense, economy, education and transports getting extra funds, Prime Minister Victor Ponta said on Tuesday, July 29. The total revenues will increase by EUR 243 million and EUR 305 million will be added to total expenditures, Ponta said. The initial budget for this year had total consolidated revenues of EUR 49.275 billion and total expenditures of EUR 52.668 billion (calculated at an exchange rate of 4.4 RON/EUR). This means that increases in both revenues and expenditures represent less than 1 percent of the initial figures. Ponta explained that this positive reshuffle comes after budget revenues collected in June were 99.7 percent of the estimated level while in July revenues collected are above the estimated level. The total revenues collected in the first half of this year amounted to EUR 22.8 billion, 2.9 percent higher in nominal terms than in the same period of 2013, while total expenditures were EUR 23.6 billion, some 0.3 percent lower, in nominal terms, than in H1 2013, the Budget Ministry announced on Friday, July 25. The budget deficit after the first half of the year was of EUR 0.8 billion, which is 0.5 percent of the estimated GDP for this year. “I want to assure everyone that the budget deficit estimated for this year remains at 2.2 percent of GDP, after this amendment, and that we keep in the budget all the necessary sums for the co-financing of EU funded programs,” Ponta said. He added that none of the liquidity buffers, or reserves that were put aside when the budget was adopted and were agreed with international financing institutions, were touched in the amendment process. Following the rectification of the consolidated budget, the Health Ministry will get an extra EUR 111 million to cover expenditures related to national programs and the emergency intervention system and the National Health Insurance House (CNAS) will be allotted some EUR 38 million more on the initial budget. The Government also allotted an extra EUR 91 million for the Defense Ministry, as Romania pledged to increase defense spending. The Economy Ministry will get another EUR 68 million to support schemes for SMEs and for other investments. The Education Ministry gets EUR 34 million extra to pay back salary cuts for teachers. Also, the Transport Ministry will be allotted EUR 81 million more for the railway company. Some cuts will be made at the Labor Ministry, Justice Ministry and Culture. The Government will also allot EUR 136 million to cover up some arrears of local authorities. Prime Minister Ponta closed his statement mentioning that a second budget rectification will be made, probably in September. Andrei Chirileasa, andrei@romania-insider.com