Romania 2017 budget based on 5.2 pct growth estimate

Romania’s draft public budget for 2017 is based on a growth estimate of 5.2 percent of GDP this year, above the expectations of economists. In addition, the budget deficit limit for this year is set at 2.96 percent of GDP.

The government expects a higher collection of taxes this year, and has pushed up the public investments budget to 4.2 percent of GDP, compared to 3.9 percent of GDP last year.

“The projected revenues to the state budget for 2017 represent 31.2 percent of GDP, 32.4 percent in 2018, while in 2020 they should reach 32.8 percent of GDP, an evolution marked by the evolution of the macroeconomic indexes in this period of reference, and based on the bills that have been enforced up to now. The budget expenses projected by 2017 represent of 34.2 percent of GDP, reaching 34.8 percent of GDP in 2020, marking a growth of 0.6 percentage points, considering that the investment expenditure grows by 2.6 percentage points in 2020 compared to 2017,” according to the report that maps the macroeconomic perspective for 2017 and the projections for 2018-2020, published by the Ministry of Finance.

The report states that the number of employees is set to grow by 4.3 percent, while the unemployment rate is set to fall to 4.3 percent at the end of 2017.

The government points out that the minimum wage is set to grow by 16 percent starting February, to RON 1,450, while employees in the public administration will see their wages grow by 20 percent. Also, the minimum pension will increase from RON 400 to RON 520.

The World Bank expects Romania’s economy to grow by 3.7 percent of GDP this year. The financial institution estimated that the economy grew by 4.7 percent last year. Economists expect Romania’s growth to slow down as the impact of the cut of taxes and increase of public sector wages diminishes.

Ovidiu Posirca