Romania’s Government estimates a 3.3% economic growth for this year, compared to a 2.5% economic growth estimated when drafting the initial state budget for 2015. The executive led by Prime Minister Victor Ponta thus plans to increase its spending by EUR 1 billion compared to the initial budget for 2015, also anticipating higher revenues.

The consolidated budget deficit forecasted for 2015 should remain unchanged at some EUR 2.9 billion, or 1.86% of the country’s GDP.

The Government estimates it will make more money from taxes on company profits and individual revenues while property taxes should generate lower revenues than initially forecasted. The VAT revenues are also expected to go down by EUR 53 million compared to the initial budget for 2015, as a consequence to the VAT rate cut for food starting June 1. However, this drop will be fully compensated by higher revenues from excise duties. The Government also expects higher non-fiscal revenues.

On the expense side, the Government expects to spend more on social assistance and public employees’ salaries while funding for EU financed projects will be cut compared to the previous budget version. The state recorded a budget surplus of almost EUR 1 billion in the first six months of the year, as some revenues increased more than expected.

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editor@romania-insider.com