Romania’s budget deficit reaches 2.4 percent of GDP at end-October 2011

Newsroom 28/11/2011 | 16:02

Romania’s budget deficit reached RON 13.3 billion, which is 2.4 percent of GDP in the first ten months of 2011, according to data from the Ministry of Public Finance. The forecast for this year’s budgetary deficit is RON 24 billion, representing 4.4 percent of GDP.

Revenue – 8.6 percent increase by end-October 2011

Revenue to the general consolidated budget increased by 8.6 percent to RON 148.7 billion, in the first ten months of 2011. The collection of VAT increased by 21.3 percent at end-October, compared to the first ten months of 2010. Revenue from excises has also increased by 12.8 percent through to October 2011 versus the similar period of 2010.

The revenue from social insurance contributions increased by 9.2 percent in the first ten months of 2011, while collection from profit tax increased by 1.8 percent.  However, an 11.2 percent increase was recorded in the third quarter versus the second quarter of 2011.

Reimbursements from the EU increased by 46.2 percent in the first ten months of 2011, compared to the similar period of 2010.

Expenses – decrease of 0.9 percent, ten months into 2011
The expenses from the general consolidated budget reached RON 161.9 billion by end-October 2011, which is a 0.9 increase in nominal terms, versus the similar period of 2010. This was attributable to increased financing for EU-funded projects, but in real terms, expenses went down by 1.7 percent of GDP.

Goods and Services expenditure increased by 4.4 percent in the same period, due to payments for medical services and pharmaceuticals. An increase of 16.1 percent was recorded in local budgets, due to the transfer of public hospitals to local administrations.

However, personnel expenses decreased by 12.8 percent, subsidies went down by 13.4 percent and social assistance expenditure also decreased by 1.1 percent.

Payments for EU funded projects have increased by 67 percent in the first ten months of 2011, while interest payments increased by 24.3 percent compared to the similar period of 2010, representing 79.4 percent of the annual program.

Investments, including capital expenditure and development programs, have totaled RON 26.3 billion in the first ten months of 2010, up RON 4 billion compared to the similar period of 2010.

Ovidiu Posirca

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