The public deficit has narrowed to RON 9.5 bln (EUR 1.9 bln) in January-February, 25% less compared to the same period last year, the Ministry of Finance announced.

The performance was nearly entirely backed by base effects after the RON 4.2 bln (0.37% of GDP) “injected in the economy” in the same period last year, out of which RON 2.2 bln expenditures related to the Covid-19 pandemic.

The rising consumer prices (+8.4% YoY in January-February) combined with a modest increase in retail sales (+3.4% YoY in January) contributed to stronger gross VAT and excise collection as well.

The budget revenues increased by 28% to RON 68.25 bln - or 5.2% of the projected GDP compared to 4.5% of GDP in the same period last year - driven up by the VAT collections (+47%, or +RON 5.5 bln), ‘other taxes on goods and services’ that quadrupled (+RON 2.6 bln) and75% stronger (+RON 2 bln) transfers from the European Union’s budget.

The budget expenditures increased by 18% to RON 77.76 bln in January-February - or 5.9% of GDP, compared to 5.6% of GDP in the same period last year. The most important increase in expenditures was posted by the social security expenditures, which increased by 22.6% (+RON 5.85 bln).

The interest on public debt notably rose by 72%, or by RON 1.9 bln - to 0.3% of the entire year’s GDP.

iulian@romania-insider.com

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