Romanian govt to discuss 2014 budget in first reading on Nov 14 - data

By bne IntelliNews November 14, 2013

Romania’s government is expected to discuss on November 14 in first reading the budget planning for 2014, Ziarul Financiar daily announced. Romanian officials discussed the budget planning for next year, as well as a revised version of this year’s budget with the IMF and the EC a couple of weeks earlier when their representatives ran a first review of their 2013-2015 agreements with Romania.

The cash deficit of the budget is planned to narrow from 2.5% of GDP this year to 2.2% in 2014. The government expects GDP to reach RON 658.6bn (EUR 148bn) in 2014 – up from RON 626.2bn in 2013 – driven by 2.2% real GDP growth rate. The exchange rate would remain steady from this year at RON 4.45 against the euro. End-year headline inflation is projected at 3% for next year – up from 1.8% projected by the central bank for the end of 2013.

Budget revenues would increase by 5.2% y/y to RON 216.8bn in 2014, thus remaining at a modest 32.9% of GDP ratio. Besides the conservative projection, the government considers freezing 10% of the ministries’ budgets until the second budget adjustment scheduled for the autumn [Oct-Nov]. The move would be aimed at avoiding problems caused by actual revenues falling significantly below the targets during the year.

Budget expenditures would increase by only 4.3% y/y under the budget planning, at a slower rate then revenues, to RON 231.3bn [35.1% of GDP].

General government budget
  2013 2013 2014 2014   2013 2013 2014 2014
  RON bn % of total RON bn % of total   RON bn % of total RON bn % of total
Revenues, o/w         Expenditures, o/w        
Profit tax 10.8 5.2 11.4 5.2 Payroll 46.1 20.8 47.8 20.7
Income tax 22.8 11.1 24 11.1 Goods&services 39.5 17.8 39.3 17.0
VAT 52.8 25.6 54.6 25.2 Investments 36.2 16.3 40.1 17.3
Excise tax 20.9 10.2 24.1 11.1 Interest 10.7 4.8 11.2 4.9
Social security 54.3 26.4 57.8 26.6 Social security 68.8 31.0 71.5 30.9
Property tax 4.4 2.2 5 2.3 Transfers 5.2 2.3 5.7 2.5
Non-fiscal 17.4 8.4 17.4 8          
From EU 13.07 6.3 14.8 6.9          
Total 205.9 100 216.8 100 Total 221.8 100 231.3 100
Source: ZF

 

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