11-month budget deficit widens to 3.56 pct of GDP

Romania's 11-month general consolidated budget deficit rose to 3.56 pct of GDP from 2.8 pct at the end of October, shows data released on Monday by the Public Finance Ministry. The January - November 2019 budget execution ended with a deficit of 37.05 billion lei, compared to 28.83 billion lei for the first 10 months of the year. Compared to the same period last year, the budget deficit rose by 11 billion lei, or over 40 percent. According to the Public Finance Ministry, 11-month revenues to the consolidated general budget amounted to 289.4 billion lei, accounting for 27.8 pct of GDP, up from 27.5 pct of GDP in the year-ago period. Compared to the same period of the previous year, there have been increases in collections from social security contributions (by 12.6 billion lei more, or +14.2 pct), profit tax (up by 1.9 billion lei, or +12.5 pct), VAT (up by 5.3 billion lei, or +9.9 pct) and excise duties (up by 2.6 billion lei, or +9.8 pct). Revenues from social security contributions were influenced by the rise in the number of employees in the economy, the gross average wage, the national minimum wage, but also by the new legislative provisions regarding the transfer of contributions from the employer to the employee, as per OUG No. 79/2017, the Finance Ministry explained. Revenues from property taxes and fees increased by 650 million lei, or 12.4 pct. Conversely, there has been a 32.7 pct YoY decrease in revenues from the tax on the use of the goods, the authorization of the use of goods or the carrying out of activities, following the enforcement of OUG No. 52/2017 on the refund of the amounts representing the special car and motor vehicle tax, the pollution tax on vehicles, the polluting emissions tax on vehicles and the environmental stamp for vehicles. The amounts from the European Union for payments made stood at 20.3 billion lei. Spending of the consolidated general budget amounted to 326.4 billion lei, by 13.5 pct higher YoY. Personnel expenses advanced by 19.1 pct as an effect of the wage increases granted under Framework Law No. 153/2017 on the remuneration of personnel paid from public funds. Spending on goods and services increased by 18.2 pct compared to the same period of the previous year. There was a significant increase in the budget of the Single National Health Insurance Fund and the state budget. Spending with subsidies also went up by 10.2 percent. Social assistance expenditures increased by 11.5 pct YoY, mainly as an effect of the successive increase of the pension point by 10 pct as of July 1, 2018 - to 1,100 lei, and by 15 pct starting from September 1, 2019 - to 1,265 lei, as well as of the increase in the social allowance for pensioners from 520 lei to 640 lei (starting July 1, 2018) and from 640 lei to 704 lei (starting September 2019). Investment spending, including capital expenditures as well as expenditures with development programs financed from domestic and external sources amounted to 33.2 billion lei, by 26.3 pct higher than in the same period of the previous year. The budget deficit target for this year was revised upwards from 2.76 pct to 4.4 pct of GDP at the second budget adjustment this year. AGERPRES (RO - editor: Andreea Marinescu; EN - author: Simona Klodnischi, editor: Rodica State)