February 27 (SeeNews) - Romania's January consolidated budget surplus fell to 0.37% of the gross domestic product (GDP) projected for 2017 from 0.62% of GDP a year earlier, the finance ministry said on Monday.
The consolidated budget surplus totalled 3 billion lei ($703 million/664 million euro) in January, as revenue dropped 5.7% year-on-year to 19.2 billion lei and spending rose by 3.5% to 16.2 billion lei, the ministry said in a statement.
Revenues from income tax increased 25%, while social security contributions grew 9.4% in January.
On the other hand, VAT revenue decreased by 25%, reflecting a VAT cut from 24% to 20%, in effect from January 2016, and a reduction of VAT to 9% for some food items, in effect from June 2015.
Investments were down 55% on the year to 305.8 million lei, or 0.04/GDP, in January.
Investments in 2016 decreased to 29.5 billion lei, or 3.9% of GDP. By comparison, in 2015 investments amounted to 41.3 billion lei or 5.9% of GDP.
Romania targets a consolidated budget gap of 2.99% of GDP on a cash basis in 2016, below the 3% EU ceiling. According to the EU's 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.
Romania's consolidated budget showed a deficit equivalent to 2.41% of the projected GDP last year, compared to 10.3 billion lei shortfall, or 1.47% of GDP in 2015.
(1 euro=4.5115 lei)