Romanian Govt Performs Second Budget Revision In ’09

The raising of the budget deficit target comes as result of a decrease in consolidate budget revenues this year by 17.4 billion lei (3.5% of the GDP; EUR1=RON4.2157) as opposed to the initial program, due to a decrease in VAT revenues (RON4 billion), social contributions (some RON5 billion) and non-fiscal revenues (RON4.1 billion).

 

Consolidated budget expenses are reduced by RON5.2 billion (1.1% of the GDP). In the state budget, expenses are increased by RON5 billion, the state insurance budget is increased by RON487 million while the unemployment budget grows by RON895 million, "in order to cover any increase in the number of unemployed people," said finance minister Gheorghe Pogea.

 

The infrastructure projects budget received an additional RON900 million, where RON500 million went to the road infrastructure and RON400 million went to school infrastructure and county roads.

 

The government guarantee ceiling was increased by EUR400 million for the cofinancing of projects funded with EU or reimbursable sums.

 

Pensions received an additional RON487 million, while the state budget will grant subsidy worth RON5.5 billion to the pension budget, to counter the lack of funds.

 

Overall, fund reductions for ministries reach RON1.4 billion, with lower funds allotted to the Ministry of Regional Development and Housing (minus RON347 million), the Ministry of Education (-RON154 million), the Ministry of Public Finance (-RON205 million), the Ministry of Health (-RON113 million), the Ministry of the Environment (-RON108 million), the Ministry of Youth and Sports (-RON78 million), the Ministry of Communications (-RON43 de million), the Ministry of Tourism (-RON30 million), the Secretariat General of the Government (-RON66 million), other fund users of the state budget (-RON151 million).

 

The Ministry of Economy will receive RON169.9 million mainly to secure the production of heavy water, the program for the conservation and shutdown of mines as well as to pay budget debts top the Nuclear Activities Department and the payment of debts to mining company SNLO.

 

The Ministry of Administration and Interior will receive RON66.2 million, with the bulk of the sum going, by Government Decision, to the local budget that will use the money solely to pay the overdue debts of power plants to the state budget, while the Ministry of Justice will receive RON61.3 million to pay all salaries until the end of 2009, as well as for maintenance expenses in view of a normal activity in courts.

 

For the integrated state frontier security system, the Ministry of Administration and Interior will receive an additional RON353.6 million from external loans.

 

Pogea reminded that, as explained in the draft budget correction, the funds at the Ministry of Justice were allotted for the functioning of structures in the system, and not for magistrate salaries, whose salary rights were regulated, as far as payment is concerned, through a separate normative act issues in Summer 2009.

 

Following the revision, revenues cumulate 31.6% of the GDP (RON157.2 billion), while overall spending reaches 38.9% of the GDP (RON193.7 billion), calculated on a GDP estimated at RON497.3 billion.

 

For this year, the government anticipates an economic decrease of 8-8.5 %.

 

Inflation is estimated for this year at 4.3%.

 

Finance minister Gheorghe Pogea said that, without this revision, the budget deficit would have been higher than 8%.

 

The first budget revision of 2009 was performed in April, following the loan agreement convened with the International Monetary Fund and the European Commission.