Viorica Dancila: Second budget revision is underway, will keep budget deficit below 3 percent

Aurel Dragan 23/11/2018 | 16:17

The government led by prime-minister Viorica Dancila approved today the second budget revision of the year. The revision is classified as positive and it will keep the budget deficit at 2.97 percent of GDP, falling within the maximum target of 3 percent.

“We are talking about the second budget revision today. It is a positive budget rectification, and its main objective is to meet the budget deficit target of 2.97 percent of GDP and provide the necessary funds for the implementation of government policies and programs and for the good functioning of public institutions. We will provide the money required to pay the rights of disabled people and children’s allowances. In this respect, we allocate to the Ministry of Labor about RON 787 million,” prime-minister Viorica Dancila said at the beginning of the Government meeting.

The Head of the Executive indicated that the revision ensures the payment of military pensions to the police, as well as the supplementation of funds for compensated medicines.

“We provide the necessary resources for running healthcare actions and programs. as we’ve increased the budget of the Single National Health Insurance Fund by RON 660 million, for the reimbursement of medical services, compensated and free medicines and for the national health programs. At the same time, we’re allocating more than RON 317 million to the Health Ministry for payment of salary rights for staff in permanence centers and emergency services units. We are taking measures to provide the necessary resources for the payment of state military pensions to the police. For this purpose, we provided an additional RON 116 million to the Ministry of Internal Affairs,” said Dancila.

According to the prime minister, the budget revision also provides “additional funds for ensuring all priority mandatory expenditures and for the supply of the government’s reserve fund with RON 700 million, money that is necessary for unexpected situations”. But, as the Finance Minister said, the public investment budget will be cut by RON 235 million.

The Ministry of Public Finance (MFP) announced on November 21 that it had drafted the second budget rectification for this year, with a budget deficit target of 2.97 percent of GDP.

“The economic results so far justify the possibility of achieving a nominal value of the gross domestic product of RON 949.6 billion, compared to RON 907.9 billion, as estimated for the initial budgeting of this year and of RON 945 billion as estimated in the first budget revision. Thus, the budget revision project envisages an increase in the revenues of the general consolidated budget by RON 228.9 million, and expenditures will increase by RON 365.6 million,” the Finance representatives announced.

Additional funding has been approved for the following institutions:

  • Public Finance Ministry: + RON 2.69 billion, of which RON 1 billion in interest rates, RON 671.6 million for Romania’s contribution to the EU budget and RON 700 million to the government’s reserve fund
  • Labour and Social Justice Ministry: + RON 787 million, mainly for state benefits for children and rights of the disabled
  • Health Ministry: + RON 211.5 million, mainly for salaries paid by the state to units providing emergency care
  • Justice Ministry: + RON 138.5 million, of which 100 million for personnel expenses
  • Regional Development and Public Administration Ministry: + RON 85.2 million; funds ensured for carrying out programs and projects with external non-reimbursable financing in the 2014-2020 Regional Operational Program (+ RON 98.4 million)
  • Internal Affairs Ministry: + RON 70.6 million; + RON 70.6 million; savings have been identified with staffing and RON 116 million have been ensured for paying military state pensions
  • The National Fund for social health insurance’s spending is boosted by RON 600 million to ensure the sums required for the settlement of medical services and medical drugs
  • State Social Insurance: + RON 45.4 million
  • Unemployment Insurance: + RON 82.6 million.

Funds will be cut from the following ministries, due to the spending status of projects mainly carried out through European funds:

  • Transport Ministry (- RON 1.16 billion)
  • Research and Innovation Ministry (- RON 228.9 million)
  • Education Ministry (- RON 198 million)
  • Culture and National Identity Ministry (- RON 176.8 million)
  • Communications and Informational Society (- RON 166 million)
  • European Funds Ministry (- RON 164.9 million)
  • Public Finance Ministry (- RON 128.5 million)
  • Waters and Forests Ministry (- RON 95.9 million)
  • Business Environment, Trade and Entrepreneurship Ministry (- RON 71.6 million)
  • Agriculture and Rural Development Ministry (- RON 49 million).

The Minister of Finance also said that the third issuance of government bonds for the population will be launched soon, with a maturity of 2 years and a 4.5 percent interest rate.

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