Ljubljana stock indices close in red
Croatia’s share indices snap four-day winning streak
Foreign tourist arrivals to Bosnia up 27% y/y in Oct
Foreign cruise ship journeys to Croatia increase y/y in Jan-Oct
Bulgarian share indices keep ascending, Eurohold paces gainers
Dec 22, 2017 14:18 EEST
December 22 (SeeNews) - Romania's parliament approved on Friday the consolidated 2018 state budget, which projects 5.5% economic growth and a deficit equivalent to 2.96% of gross domestic product (GDP).
The 2018 state budget was adopted with 255 votes in favour and 95 against, according to data posted on the website of the lower house, the Chamber of Deputies.
The governing coalition of left-wing Social Democrat Party (PSD) and centre-right Liberal-Democrat Alliance (ALDE) control among themselves 220 of 465 seats in parliament.
Members of parliament from opposition right-wing National Liberal Party (PNL) and centre-right Save Romania Union (USR) and Popular Movement Party (PMP) voted against.
GDP in 2018 is estimated at 907.85 billion lei ($232 billion/196 billion euro). Budget revenues are projected at 287.5 billion lei, or 31.7% of GDP. VAT proceeds are forecast at 6.8% of GDP, excise duties at 3.3% and wage tax and income tax at 2.3% of GDP.
The budget expenditures in 2018 are projected at 314.5 billion lei, or 34.6% of GDP. Social security spending and public sector personnel costs amount to 10.9% and 8.9%, respectively.
The budget deficit equivalent to 2.96% of gross domestic product (GDP) is calculated according to the European System of Accounts (ESA) standards. According to the Maastricht treaty signed in 1992, the ratio of the annual general government deficit relative to GDP at market prices must not exceed 3% at the end of the preceding fiscal year.
An average annual inflation of 3.1%, an average exchange rate of 4.55 lei per euro and a monthly average monthly salary of 2.614 lei are projected in the 2018 budget.
Now, the budget needs to be endorsed by president Klaus Iohannis.
Romania's consolidated budget deficit increased to 0.79% of the projected 2017 GDP in the 10 months through October, from 0.17% in the prior-year period. The 2017 budget bill is built on projections of 6.1% economic growth and deficit equivalent to 2.96% of GDP. In 2016, Romania's economy expanded by 4.8%.
Romania's annual economic growth accelerated to 8.8% in the third quarter of 2017 from 6.1% in the previous quarter on the back of strong performance of the agricultural and industrial sectors and on rising consumption. Overall, in the first nine months of 2017, Romania's economy grew by 7% on the year in non-adjusted terms and and by 6.9% in seasonally adjusted terms.
In November, Moody's Investors Service said that although Romania has made material progress in correcting macroeconomic imbalances, these improvements could be eroded in the medium-term due to a loose fiscal policy and lack of reform.
Also in November, the European Commission said that Romania has failed to do enough to reduce its 2017 budget deficit and that the necessary annual adjustment needs to be at least 0.8% of GDP. The Commission warned that Romania may not meet its budget deficit target and urged the government to take action to avoid the opening of an excessive deficit procedure.
Also last month, the European Bank for Reconstruction and Development (EBRD) increased its forecast for Romania's economic growth to 5.3% in 2017, but warned that the government may not meet its budget deficit target.
In October, the International Monetary Fund (IMF) said that Romania's real GDP growth is projected to reach 5.5% in 2017 before it decelerates to 4.4% in 2018.
(1 euro =4.6401 lei)
You have run out of free articles this month.
Sign up in for
and get ten (10) free articles per month or sign up for
and get unlimited access.
Browse our free newsletter options