The general government budget posted a deficit of RON 23.5 bln (EUR 4.7 bln) in the first half of the year, 30% less compared to the same period last year, the Finance Ministry announced.

The deficit to GDP ratio also decreased from 2.9% to 1.7% in January-June this year.

For compiling the ratios, the ministry used the revised projection for this year’s GDP, namely RON 1,373 bln (+16% YoY nominally or +3.5% YoY in real terms).

Total budget revenues increased by 23% YoY to RON 216.7 bln, particularly driven by stronger net VAT collections (+RON 9.6 bln or +27% YoY), other taxes on goods and services - including the windfall tax levied to energy companies (+RON 7.0 bln or +310% YoY), and more non-tax revenues including the revenues from the sale of CO2 certificates (+RON 8.2 bln or +63% YoY).

The expenditures increased comparatively slower, by only 14.3% YoY.

The interest paid on public debt rose by 48% YoY to RON 13.1 bln or 1% of the GDP estimated for the whole year from 0.8% of GDP in the same period last year.

The public payroll was kept under control: +4.7% YoY to 4.2% of the year’s GDP, down from 4.7% in the same period last year.

The social security expenses rose by 16.8% but remained constant as a share of GDP (6.4%).

Taken together, the capital expenditures and the expenditures for projects with foreign financing (grants or loans) increased by 7% YoY to RON 26.7 bln, 1.9% of the year’s projected GDP (down from 2.1% last year).

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iulian@romania-insider.com