Romania’s general budget recorded a surplus of RON 1.35 billion (EUR 296 million) in the first four months of this year, namely 0.17% of the GDP.

The budget surplus significantly increased compared to the same period last year, when the budget was close to balance.

Government spending was surpassed by the advance of revenues between January and April this year, according to the data the Ministry of Finance published yesterday. Budget revenues amounted to RON 80.1 billion (EUR 17.6 billion) in the first four months of this year, up 8.4% over the same period last year.

Revenues from social contributions rose by 14.9% year-on-year whereas those from the individual income tax went up by 13.4% year-on-year. Budget revenues from VAT collection decreased by 3.6% between January and April this year compared to the same period last year. The drop was related to the cut in the VAT rate from 20% to 19% at the beginning of this year.

Meanwhile, government spending reached RON 78.8 billion (EUR 17.3 billion) in the first four months of this year, up 6.8% year-on-year. Expenditure on public sector salaries increased by 18.1% during this period compared to the first four months of 2016 as a result of the wage increases granted in the second half of last year and earlier this year. The welfare expenses were also 10.1% higher than in the first four months of 2016, due to higher pensions.

However, the government’s investment spending went down by 60% compared to the same period of 2016.

editor@romania-insider.com