The Romanian Government adopted on Wednesday the 2018 budget draft. The budget is based on a 5.5 economic growth, an average inflation level of 3.1 percent, an average exchange rate of 4.55 RON/Euro and an average monthly income of RON 2,614.
The cash budget deficit is estimated at 2.97 percent of GDP, while ESA deficit is estimated at 2.96 percent of the GDP, right below the budget deficit target of 3 percent of the GDP.
A share of 4.2 percent of the GDP, namely RON 38.5 billion will go towards investments, up by EUR 11.5 billion compared to 2017. Social assistance expenses have seen the biggest increase, up to RON 98.6 billion, representing 10.9 percent of the GDP.
The budget draft includes the necessary resources for the wage increases to be operated according to the schedule set via the wage law and the commitment to increase the pension point by 10 percent.
The budget revenues are estimated to stand at RON 287.5 billion, representing 31.7 percent of the GDP. The biggest share of the total budget revenues are represented by contributions – 10.1 percent, followed by VAT with 6.8 percent, excises with 3.3 percent, and wage and income taxes with 2.3 percent of the GDP.
Budget expenses are estimated at 314.5 billion, representing 34.6 percent of the GDP. The biggest rise in budget expenses is caused by the increase in social assistance expenses, which stand at RON 98.6 billion, representing 10.9 percent of the GDP.
Staff expenses are estimated at RON 81.2 percent, representing 8.9 percent, representing a RON 11.6 percent growth compared to 2017. Public debt expenses will stand at RON 12.1 percent, namely 1.3 percent of the GDP.
Next, the budget draft will be sent to Parliament.