Romania’s general government deficit reached RON 7.9bn [1.27% of the full-year GDP projection] in Jan-Aug, remaining in line with the quarterly and annual targets agreed by Romania with the IFIs, the finance ministry said in an online release. Romania targets 2.3%-of-GDP general government deficit for full 2013.
The primary balance furthermore shows a 0.05%/GDP surplus in the period, demonstrating that the budgetary policy is prudential and sustainable, the ministry commented.
Revenues increased by 4.4% y/y to RON 131.2bn [20.9% of full year GDP]. Profit tax revenues shrank by 0.8% y/y to 6.1% of total revenues. Above-average rises were reported in the income tax revenues [8.2% y/y to 11.5% of total] and social security contributions [4.5% y/y to 27.2% of total]. Both income taxes and social contributions were pushed up by the higher wages in the budgetary sector, higher minimum statutory wage and higher pensions, the ministry explained.
Net VAT collections increased by only 3.1% y/y [to 25.1% of total] as the government has strived to reduce the payment arrears to recipients of reimbursed VAT.
Expenditures increased by 4.8% y/y to RON 139.1bn [22.2% of GDP]. Capital expenditures notably dropped by 9.7% y/y to 7% of the total. Public payroll, however, increased by 15.2% y/y to 22.2% of total. Total expenditures related to EU-funded projects accounted for 5.8% of total, down from 7.1% last year. Direct expenditures on such projects shrank by 11.5% y/y, while other expenditures related to such projects plunged by 46% y/y.
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