Romania’s budget deficit almost doubles in first eleven months

Romania’s consolidated general budget, which includes the state budget and the pension and unemployment budget, recorded a deficit of RON 10.2 billion (EUR 2.2 billion) in the first eleven months of this year, namely 1.21% of the GDP, the Finance Ministry announced. The budget deficit grew by 86% compared to the same period last year, driven up by higher personnel costs as a result of increases in the salaries of public employees. In the first ten months, the budget deficit was RON 6.6 billion (EUR 1.4 billion), five times higher compared to the same period last year. This means that the budget deficit reached RON 3.6 billion (EUR 774 million) in November. The revenues of Romania’s consolidated general budget amounted to RON 228.2 billion (EUR 49 billion) in the first eleven months of this year, up 11% year-on-year. The revenues from social contributions increased by 16.6% during this period, whereas the revenues from the income tax rose by 8.5% year-on-year. Non-fiscal revenues also went up by 22.1%. Meanwhile, the revenues from VAT only increased by 1.5% year-on-year and the collected excises went down by 3.5%, despite a double-digit consumption growth. The revenues from the tax on profits declined by 5.4%. The state’s expenses reached RON 238.4 billion (EUR 51.2 billion) during this period, up 12.9% year-on-year. Staff costs increased by 21.3% over the same period last year, driven by wage increases in the second half of 2016. Welfare expenses also increased by 12.9% due to pension increases. The state’s investments amounted to RON 17.5 billion (EUR 3.8 billion), representing 2.1% of the GDP. Romania will have excessive budget deficit in 2018 editor@romania-insider.com