Romania’s Government posted a small deficit of RON 1.68 bln (EUR 340 mln) in January, less than half of the deficit in January 2021, the Finance Ministry announced. The deficit to GDP ratio dropped to 0.13% from 0.31% in January 2021.

Seasonally, the public budget balance in the first month of the year is in the surplus area in normal years, though.

This year, the revenues rose by 25% compared to January 2021 to RON 36.49 bln, while the expenditures advanced by only 16.1% to RON 38.17 bln.

The 58% stronger net VAT collections (RON 9.56 bln) and the 14-fold rise in the revenues generated by “other taxes on goods and services” (RON 1.12 bln) contributed more than half of the overall rise in the revenues to the general government budget.

This was achieved, however, against the subdued revenues in January 2021 - when the companies were still under the effect of the fiscal facility allowing them to defer tax payments. The budget revenues are likely to post much lower growth rates later in the year.

The expenditures were dragged up in January by the social security payments - nearly 30% higher than in January 2021 and RON 17.95 bln (47% of total month’s expenditures compared to 42% in the same month last year). Public payroll, however, is still under control with a minor 1.1% advance to RON 9.25 bln.

The interest on public debt, a key element of the budget execution as the interest rates are rising, tripled in January to RON 1.69 bln, accounting for 4.4% of total expenditures compared to 1.7% in January 2021. 

iulian@romania-insider.com

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