Romania’s 2014 Budget

The Romanian Government on Thursday adopted the 2014 budget.

Roxana Vasile, 15.11.2013, 13:51

In 2014 Romania’s economic growth rate is estimated at 2.2%, the inflation rate at 2.4% while the average leu-euro exchange rate is supposed to stand at 4. 45 lei. These are the macroeconomic indicators based on which the Romanian government discussed and approved the country’s 2014 budget. According to the Social Democrat Prime Minister Victor Ponta, next year Romania will have the biggest GDP since 1989.

At the end of 2 days of intense negotiations the Government came up with the following figures: out of an estimated total of 230 billion lei, the equivalent of almost 500 million euros, 216 billion will come from fees and duties, taxes and other revenues, and the difference of 14 billion will account for loans and will be included in the budget deficit estimated to stand at 2.2% in 2014. 40 billion lei will be earmarked to administration expenses and 6 billion will go into subsidies for agriculture. The amount for investments will reach 40 billion lei in 2014, which accounts for 6% of the GDP. 120 billion lei have been allotted to salaries, pensions and social security.

Pensions will be index-linked by 3.76%. The minimum wage will be increased in two stages up to 900 lei, that is almost 200 euros. Also monthly grants of almost 150 euros will be given to resident physicians and pharmacists. Actually the healthcare system will get over 30 billion lei in 2014, the healthcare and education systems benefiting in 2014 from substantial raises. Prime Minister Victor Ponta:

“10% will be added to the salaries of junior teachers, graduate assistants and junior lecturers. For tenure teachers we have provided for this year more than 1 billion lei to continue the payment of court expenses, as they won in court the salary rights cut by the previous government in 2010; 10% will also go to subsidies for students for dormitory accommodation. “

Increased amounts of money will go to the Development, the Environment and the Finance Ministries as they will have to co-finance various European projects. In order to support all these expenses, the Government counts on improving the rate of revenue collection to the budget, on reducing fiscal evasion and increasing returns.

The government will also have to deal with the criticism of the center-right opposition, which speaks of a budget of economic involution that will not bring economic growth but that will, on the contrary, negatively affect the business environment and will tax Romanians more. The draft budget for 2014 will be forwarded to Parliament for debate and approval in early December.