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Romania's Jan-May cons budget gap narrows to 1.57%/GDP

Romania's Jan-May cons budget gap narrows to 1.57%/GDP Source: SeeNews, pixabay.com

BUCHAREST (Romania), June 27 (SeeNews) - Romania's consolidated budget was in deficit equivalent to 1.57% of the gross domestic product (GDP) projected for 2022 at the end of May, compared to a budget gap of 2.22% of GDP a year earlier, the finance ministry said.

The consolidated budget deficit totalled 21 billion lei ($4.5 billion/ 4.2 billion euro) at the end of May, as revenue for the first five months of 2022 rose 21.5% year-on-year to 179 billion lei, whereas spending increased by 15.2% to 200 billion lei, the finance ministry said in a statement on Saturday.

Tax revenue rose by an annual 18.2% in the January-May period of 2022, social security contributions grew 10.9% and VAT proceeds jumped by 29.5%. Excise duty revenue rose 1% on the year, mainly due to higher energy products excise.

Amounts reimbursed or granted by the EU totalled 12.6 billion lei in the first five months of 2022, up 22.2% on the year.

Investments totalled 16.45 billion lei in January-May, compared to 16.9 billion lei in the same period of 2021.

Earlier this month, Romania's government decided to freeze employment in public administration and state institutions starting July 1 until the end of the year, in order to cut costs and reduce the budget deficit. Romania is in the excessive deficits procedure applicable (EDP) since April 2020 because it has exceeded the EU's 3% budget deficit threshold set through the Maastricht Treaty.

For 2022, the finance ministry targets 2.9% economic growth and a cash deficit equivalent to 5.84% of GDP.

Romania closed 2021 with a consolidated budget deficit of 6.72%, compared to a budget gap of 9.61% in 2020.

(1 euro=4.9471 lei)

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