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New Draft Budget Law: Deficit of 36.15bn lei from 34.85bn lei in previous version


 The new Draft Budget Law, posted on Friday night on the website of the Ministry of Finance, provides for a deficit of the state budget of 36.157 billion lei, by 1.3 billion lei higher than in the version the previous one, of 34.857 billion lei.

"The state budget is set at revenues of 164,543.4 million lei, 258,735.1 million lei in terms of expenditures, commitment loans of 200,700.2 million lei, with a deficit of 36,156.8 million lei," the draft mentions.

According to the new report on the macroeconomic situation in 2019, the Gross Domestic Product is set at 1.022 billion lei, the economic growth at 5.5pct, inflation at 2.8pct, the revenues of the general consolidated budget to 342.675 billion lei (33.5pct of GDP), deficit of 26,118 billion lei, or 2.55pct of GDP, 287,000 unemployed and a monthly salary of 3,085 lei.

The draft budget published on 31 January provided for the revenues of the general consolidated budget at 341.51 billion lei, 33.4pct of GDP and 367.628 billion lei in expenditures, representing 35.9pct of GDP.

Main provisions of the state budget, according to PM Dancila:

  • The funding of wage and pension increases in the public system, the payment of social indemnities and support for economic stimulation policies;

  • Increase of the pension point by 15% as of September 1, 2019, from RON 1,100 to RON 1.265 and of the minimum pension by 10%, from RON 640 to RON 704;

  • Increase of the monthly guaranteed minimum wage to RON 2,080, to RON 2,350 for persons with higher education and at least one year experience, to RON 3,000 for people employed with companies operating 80% in the construction field;

  • Funding for health system will be by RON 6.1 billion higher than last year; Health Ministry will acquire this year 1,000 incubators;

  • Education will received by 48% more than last year, up to RON 30.8 billion;

  • 2019 will be the year of investments, 4.86% of the GDP, up by 45% against 2018 to RON 49.65 billion;

  • Transport Ministry will get funding by RON 6 billion higher, i.e. by 74.4% more than in 2018

  • Local budgets will have record allocations with total amounts from the state of RON 47.9 billion, i.e. 61.4% of the overall local budgets;

  • The collected income tax by the state budget will be 100% directed to the local budgets, i.e. RON 22.2 billion.

Vote in Parliament on 2019 budget, scheduled for Friday

Parliament's vote on the draft state budget law and the State Social Security Budget Act 2019 is scheduled for Friday, according to the schedule set by the Senate and the Chamber of Deputies.

Under the calendar, parliamentarians will be able to table amendments by Monday at 12:00.

The standing committees will meet on Monday at 15:00 to okay the projects, and at the same time the commissions for the budget, which will be preparing the fund report, will be working by Wednesday at 15.00.

Debates in the Parliament's plenary on the draft budget will begin on Wednesday at 15.00 and the final vote is scheduled for Friday.

On Friday, the Government approved the drafts on the State Budget Law and the State Social Security Budget Act 2019. Finance Minister Eugen Teodorovici announced that the draft budget is based on an economic growth of 5.5pct, which means a gross domestic product of 1,022.5 billion lei, a gross average salary of 5,163 lei and the number of employees in the economy will reach 5.282 million. The budget deficit was set at 2.55pct of GDP.