Budget surplus down to 0.07 pct of GDP this January

The execution of the general consolidated budget for this January ended with a surplus of 700 million lei, or 0.07 pct of GDP, down from the 1.98 billion lei or 0.21 percent of GDP recorded in the same month of 2017, the Ministry of Public Finance informs on Tuesday. Revenues to the general government budget this January amount to 22.4 billion lei - or 2.4 percent of GDP - by 16.8 percent higher in nominal terms from the same period of the previous year. According to the Finance Ministry, significant growth was registered against the same period of 2017 in collections from social security contributions (+23.1 percent), wage and income tax (+12.6 percent) and non-tax revenues (+10.5 percent). Collections from property tax increased 41.4 pct from the similar period of 2017, while collections from other taxes and taxes on goods and services advanced 17.8 pct. VAT revenues were 7.8 percent up from the year-ago period. Compensations from the European Union on account of the payments made amount to 1.2 billion lei. Spending with the general consolidated budget, worth 20.4 billion lei, was up 26.4 percent in nominal terms from the same period of the previous year. Staff expenses increased by 18.5 percent, driven by wage increases operated in 2017, specifically the 15 percent wage rise in healthcare and education as of January 1, 2017, the 20 percent increase - beginning February 1, 2017 - of the wages of the personnel paid from public funds working in local public administration institutions and authorities, the increase of the gross minimum guaranteed basic salary from 1,250 lei to 1,450 lei as of February 1, 2017, the 30 percent increase of the wages of national library and national museum personnel beginning June 2017, the 10 percent rise of police wages as of October 1, 2017, and the enforcement, beginning July 1, 2017 of the Framework Law No. 153/2017 on public sector wages. Expenses with goods and services increased 27.1 percent compared to the same period of the previous year, with the Single National Health Insurance Fund and local budgets posting the most substantial rise. Subsidies increased 40.7 percent from the same period of the previous year, driven by payments in agriculture and transport, ie support for agricultural producers and for rail public passenger transport, the cited source said. Interest rates are by 7.9 percent lower compared to January 2017, accounting for 0.1 pct of GDP. Social assistance expenditures were 13 percent up YoY mainly as an effect of the successive increase of the pension point by 5.25 percent as of January 1, 2017 to 917.5 lei, and by 9 percent as of July 1, 2017 to 1,000 lei, as well as of the increase and amendment to the calculation of the child allowance and of the return-to-work incentive. Investment expenditures, including capital expenditures and those related to development programs financed from internal and external sources stood at 476.2 million lei, by 55.7 percent higher compared to the same period of 2017. The general consolidated budget for 2019 is built on an economic growth of 5.5 pct, an average annual inflation of 2.8 pct, and a net monthly average wage of 3,085 lei. The GDP for 2019 is estimated at 1,022 billion lei and the budget deficit is estimated at 2.76 pct of GDP. Last year, the consolidated budget deficit stood at 2.88 pct of GDP, the same as in 2017. The Parliament's plenary adopted the 2019 State Budget Bill on February 15. Subsequently, President Klaus Iohannis filed with the Constitutional Court of Romania (CCR) a constitutional challenge against the 2019 State Budget Law. AGERPRES (RO - author: Andreea Marinescu, editor: Mariana Nica; EN - author: Simona Klodnischi, editor: Adina Panaitescu)

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