Romanian Government approved draft budget for 2018

The government approved on Wednesday the draft budget for 2018, which is based on 5.5% economic growth, annual average inflation of 3.1%, an average exchange rate of 4.55 lei / euro and net average earning monthly of 2,614 lei. The budget deficit in cash is estimated at 2.97% of GDP, while the ESA deficit is 2.96% of GDP, with a budget deficit target below 3% of GDP.

Expenditures foreseen for investments amount to 38.5 billion lei, which means 4.2% of GDP, up by 11.5 billion lei compared to 2017. The highest increase will be in social assistance expenditure, reaching 98,6 billion RON, which means 10.9% of GDP. After approval, the draft will be sent to Parliament.

The draft budget provides the necessary resources for the salary increases according to the calendar established by the unitary wage law and the commitment to raise the pension point by 10%.

Budget revenue is estimated at 287.5 billion lei (31.7% of GDP). The largest shares in total budget revenues in 2018 recorded their contributions by 10.1%, followed by VAT by 6.8%, excise duties 3.3%, wages and income tax by 2.3% of GDP.

Budgetary expenditures are estimated at RON 314.5 billion (34.6% of GDP). The highest increase is registered by social assistance expenditures reaching 98.6 billion lei, or 10.9% of GDP.

The staff costs are estimated at 81.2 billion lei (8.9%), which means an increase of 11.6 billion lei compared to 2017, amid the implementation of the Law on the salaries of the public employees. Goods and services are estimated at 39.9 billion lei (4.4% of GDP), while public debt expenditures are worth 12.1 billion lei (1.3% of GDP) in 2018