January 28 (SeeNews) - Romania's consolidated budget was in deficit equivalent to 9.79% of the projected 2020 gross domestic product (GDP) in 2020, compared to a gap of 4.6% of GDP in 2019, the finance ministry said on Thursday.
More than half of the 2020 deficit was due to expenditures aimed at curbing the economic impact of the coronavirus pandemic, the finance ministry said in a statement.
Another reason for the widening budget gap was the drop in revenue during the March-December period, as the coronavirus pandemic forced businesses to defer tax payments. At the same time, the government stepped up value-added tax refunds to inject liquidity into the private sector and offered tax discounts to companies and individuals.
The government spent approximately 15.07 billion lei on extraordinary payments related to the pandemic in 2020, the finance ministry noted.
The consolidated budget deficit totalled 101.92 billion lei ($25 billion/ 21 billion euro) at the end of December, as revenues edged up 0.4% year-on-year to 322.52 billion lei in 2020, whereas spending rose by 14.8% to 424.43 billion lei.
Total tax revenue increased by an annual 4.9%, with VAT proceeds 7% lower.
Amounts reimbursed or granted by the EU totalled 33.56 billion lei in 2020, up 32.4% compared to 2019.
Investments totalled 53.2 billion lei in 2020, up 18% year-on-year.
In November, the European Commission said that it would not take further steps within the excessive deficit procedure for Romania at that point in time due to the uncertainty caused by the coronavirus pandemic but would reassess the country's fiscal situation next spring.
On Wednesday, Romania's prime minister Florin Citu said that Romania's budget deficit for 2021 is seen at 7% of the GDP, adding that the government may submit the state budget bill to parliament next week.
(1 euro = 4.8735 lei)