Government approves last budget revision of the year

The Romanian Government approved the second positive budget revision this year, based on an improved economic growth forecast.

Mihai Pelin, 16.11.2017, 13:43

The Government in Bucharest has approved the second positive budget revision this year, given the fact that the budget deficit was maintained at 2.96% of the GDP and the data that point to economic growth prospects of 6.1% from the initial 5.6% estimated during the first budget revision. Under the circumstances, the nominal GDP forecasted went up from 180.8 billion Euro to 181.9 billion Euro. The revision comes shortly after Eurostat has announced that Romania reported the biggest GDP growth of the 28EU member states in the third quarter this year, of 8.6%, as compared with the same period in 2016. Finance Minister Ionut Misa has said that Romania ranks first in Europe in terms of economic development that allows for improved tax collection and the financing of some important projects such as the construction of motorways and of regional hospitals. He has also reminded that local authorities will be granted more money.

Ionut Misa: “Additional funds have been earmarked for the local budget and I refer to the payment of the amounts ordered under final Court decisions, to cover the expenses with the payment of the teaching staff in higher secondary education. There are also additional funds for the financing of the child protection system, of the private licensed education system, and also more funds for the Ministry of Labour and Social Justice, the Home Affairs Ministry, the Transport Ministry and the Health Ministry.”

The Finance Minister has also said that the funds for health programmes and the payment of the medical staff will also be supplemented. Ionut Misa has pointed out that there are ministries that will receive less money, such as the Ministry for Small and Medium Enterprises, the Ministry of Culture, the Environment Ministry, the Regional Development Ministry, the Finance Ministry and the Ministry for European Funds. On the other hand, the Government approved some social protection measures for the employees made redundant and allotted funds to the zootechnical sector.

There are economic experts, however, who criticise these measures. The situation of the state budget is not good, says Ionut Dumitru, head of the Fiscal Council, an independent body that monitors government’s economic policies. In his opinion tax collection is below expectations, social expenditure went up and public investment has been severely slashed. Ionut Dumitru has reminded that Romania has the lowest level of tax revenues in Europe, after Ireland.