Romania ended 2016 with a consolidated budget deficit of RON 18.3 billion (EUR 4.07 billion), representing 2.41% of the estimated gross domestic product (GDP), under the annual target of 2.75% of the GDP, the Finance Ministry announced on Thursday night. However, the deficit was almost double compared to 2015.

The consolidated budget revenues went down by 4.3% compared to 2015, to RON 223.7 billion (EUR 49.8 billion), mainly due to the lower VAT revenues and lower amounts of EU funds absorbed.

The At the same time, the total expenses went down by 0.6% compared to the previous year, to RON 242 billion (EUR 53.9 billion). The Government mainly cut its capital expenses, as the state’s personnel expenses, the welfare expenses, and the spending on goods and services went up compared to 2015. The full budget execution data is available here.

The new Government was supposed to approve the budget for 2017 on Friday, January 27. The first budged draft presented on Monday showed total revenues of RON 254.7 billion (EUR 57.1 billion), up 13.8% compared to 2016, and total expenses of RON 278.8 billion (EUR 62.5 billion), up 15%. The budget deficit is thus estimated at some RON 24.1 billion (EUR 5.4 billion), or 2.96% of the GDP.

The budget projection for 2017 takes into account an economic growth of 5.2%, higher than last year.

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editor@romania-insider.com