Romania’s consolidated budget deficit reached RON 24.3 billion (EUR 5.32 billion), namely 2.88% of the gross domestic product (GDP) in 2017, the Finance Ministry announced on Friday.

The deficit was under the government’s target, of 2.96% of GDP, but went up by about a third compared to 2016, when it stood at RON 18.3 billion or 2.4% of the GDP.

The consolidated budget revenues went up by 12.5% compared to 2016, to RON 251.8 billion (EUR 55.1 billion). The state’s expenses went up by 14%, to RON 276.1 billion (EUR 60.4 billion).

Although the government managed to keep the budget deficit under the 3% of the GDP threshold required by the European Union, this was done with great efforts. The public investments were once again sacrificed. The state only spent RON 26.7 billion (EUR 5.84 billion) on investment projects, 10.5% less than in 2016 and 33% less than provided in the 2017 budget law. Meanwhile, personnel and welfare expenses increased compared to 2016, due to higher salaries and pensions.

On the revenues side, the state failed to draw the estimated amount of EU funds last year but compensated this by taking extra dividends from the state’s richest companies and leaving them with less money to invest.

editor@romania-insider.com