September 27 (SeeNews) - Romania's consolidated budget was in deficit equivalent to 2.40% of the gross domestic product (GDP) projected for 2022 at the end of August, compared to a budget gap of 3.33% of GDP a year earlier, the finance ministry said.
The consolidated budget deficit totalled 32.98 billion lei ($6.45 billion/6.67 billion euro) at the end of August, as revenue for the first eight months of 2022 rose 22% year-on-year to 293.85 billion lei, whereas spending increased by 16.7% to 326.83 billion lei, the finance ministry said in a statement on Monday.
Tax revenue rose by an annual 17.6% in the January-August period, social security contributions grew 9.4% and VAT proceeds jumped by 22.6%. Excise duty revenue rose 6%, mainly due to higher energy products excise.
Amounts reimbursed or granted by the EU totalled 20.95 billion lei in the first eight months of 2022, up 20.3% on the year. Investments totalled 33.07 billion lei, up 9.6% on the year.
In August, finance minister Adrian Caciu said Romania will meet its deficit target of 5.84% of the projected GDP in 2022, despite warnings from the Fiscal Council of overestimated revenues. According to Caciu, the finance ministry also maintains its forecast for 3.5% economic growth this year.
Romania's Fiscal Council said in an analysis that the plausible cash budget deficit for this year would be around 7% of GDP, as revenues are overestimated. The Fiscal Council is a government body created in June 2010 which has the role of advising authorities in order to ensure a healthy budget.
Romania closed 2021 with a consolidated budget deficit of 6.72%, compared to a budget gap of 9.61% in 2020.
Romania is in an excessive deficits procedure applicable since April 2020 because it has exceeded the EU's 3% budget deficit threshold set by the Maastricht Treaty.
(1 euro=4.9427 lei)