Romania’s deficit reaches 2.09 percent of GDP for the first seven months

Romania has recorded a deficit of 2.09 percent of GDP or RON 11.4 billion, for the first seven months of 2011, according to official data from the Finance Ministry.

Revenue to the consolidated budget increased by 9.4 percent to RON 102.1, compared to the similar period of 2010. Data shows that revenue from VAT increased by 31 percent, while excise revenue gained 22 percent.

The collection level of contributions from social insurance  increased by 4.1 percent versus the same period of 2010, while revenue from the profit tax, although registered a descending trend, is rather similar to the previous year value. The deficit in collection for non-fiscal revenues improved by 6.3 percent. Meanwhile, the volume of sums received from the EU for payments made by the state increased by 37 percent compared to the first seven months of 2010.

Expenditure in the consolidated budget of RON 113,5 slightly increased by 0.1 percent as a result of increasing expenditure for EU funded projects, but reduced by 1.3 percent, if referred to GDP.

The goods and services expenditure increased by 11.5 in the first half of 2011 versus the similar period of 2010. This was attributable to budget increases of 22 percent for local authorities that took over local hospitals’ management and further payments for health services and medicaments, which increased by 13.3 percent.

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Personnel expenses have reduced by 17.8 percent, subsidies were slashed by 18.9 percent while social assistance payments were reduced by 2.4 percent, compared to the first seven months of 2010.

Investment expenses increased in the first seven months of 2011 to RON 17.4 billion, from RON 14.4 billion in the similar period of 2010.

Ovidiu Posirca