The consolidated general budget deficit rose to 1.72% of GDP after the first four months of this year, namely 27.35 billion lei, from 1.42% of GDP at the end of March, according to data published on Monday by the Ministry of Finance.
In the similar period of 2022, the general consolidated budget deficit was 1.23% of GDP.
“Execution of the general consolidated budget in the first four months of 2023 ended with a deficit of 1.72% of GDP, respectively 27.35 billion lei (Annex No. 1 and Annex No. 2) mainly due to the increase in the volume of investments by 58.0% more than the same period of the previous year, the compensation of bills related to domestic and non-domestic electricity and natural gas consumption in the amount of 3.57 billion lei, the higher volume of settlements for goods and services for medicines , the slowing down of the rate of revenue collections, as well as the influences of the implementation of the second stage of the Support Program for Romania”, states the Ministry of Finance.
According to the Ministry of Finance, total revenues amounted to 158.41 billion lei in the first four months of the current year, 9.7% above the level collected in the same period last year. Their evolution was mainly influenced by the dynamics of revenues from salary and income tax, insurance contributions, European funds and excise duties, while VAT receipts registered a more moderate advance (explained by a high base effect related to last year ).
Salary and income tax receipts totaled 13.10 billion lei, registering an increase of 28.1% compared to the level collected in the same period last year, mainly influenced by the increase in dividend tax receipts (128.9%) , the income from the tax related to pensions and the single declaration, also recording positive dynamics (39.2%, respectively 12.6%). At the same time, the income from the salary tax registered an advance of 9.9%, below the evolution of the salary fund in the economy (14.7%). Also, the dynamics of this category of receipts was also influenced by the expansion in the agricultural sector and the food industry of the facility granted to construction workers (negative effect from the income tax exemption from wages, according to Law no. 135/2022), as well as by the new fiscal measures regarding the modification of personal deductions introduced by OG no. 16/2022.
Insurance contributions registered 50.57 billion lei, increasing by 12.3% (year/year). As in the case of the payroll tax, their dynamics was below the evolution of the wage fund in the economy (14.5%), as a result of the expansion in the agricultural sector and the food industry of the facility granted to construction workers, according to Law no. 135/2022, as well as as a result of the measure regarding the cessation of CASS payment for pension incomes greater than 4,000 lei and the return, starting on March 1, 2023, of the amount withheld as CASS from pension incomes.
Profit tax receipts totaled 6.38 billion lei, recording an increase of 3.1% (year/year), supported mainly by the advance of profit tax receipts from economic agents (10.1%). Net receipts from VAT registered 32.76 billion lei, increasing by 3.7% (year/year). The more moderate evolution of this income category is explained both by the deceleration of the macroeconomic base, against the background of a high base effect from the previous year, and by the increase in VAT refunds by 40.4%, compared to the level reimbursed in the same period last year (9.3 billion lei in January – April 2023, compared to 6.6 billion lei in January – April 2022).
Revenues from excise duties totaled 13.07 billion lei, recording an increase of 19.9% (year/year), explained by the significant advance of excise duties for tobacco products (49.4%). At the same time, the negative dynamics of the receipts from excise duties for energy products improved (-4.5%), in the conditions of their positive evolution in April. The monthly dynamics of excise revenue generally shows a higher volatility, determined by the economic operators’ policy of fiscal warehousing of excisable products.
Non-tax revenues totaled 12.75 billion lei, recording a decrease of 6.2% (year/year), influenced by the reduction in royalties, against the background of the decrease in energy prices, which also had a negative impact on additional energy revenues ( included in the category of other taxes on goods and services).
The amounts reimbursed by the European Union on account of payments made and donations totaled 13.08 billion lei, increasing by 27.8% (year/year).
On the other hand, the expenses of the general consolidated budget in the amount of 185.77 billion lei increased in nominal terms by 15.6% compared to the same period of the previous year. Expressed as a percentage of the Gross Domestic Product, expenditures for the first four months of 2023 registered an increase of 0.3 percentage points compared to the same period of 2022, from 11.4% of GDP to 11.7% of GDP.
Personnel expenses totaled 41.72 billion lei, up 8.5% compared to the same period of the previous year. Expressed as a share of GDP, personnel expenses represent a level of 2.6% of GDP, 0.1 percentage points lower than the same period of the previous year.
Expenditure on goods and services was 23.74 billion lei, up 17.5% compared to the same period of the previous year. An increase is reflected in local budgets, respectively 16.2% compared to the same period of the previous year, as well as in the budget of the Single National Health Social Insurance Fund of 20.0% for the settlement of medicines with and without personal contribution and of medicines used in the national health programs.
Interest expenses were 12.67 billion lei. Compared to the same period of the previous year, interest payments related to the public debt portfolio increased by 3.23 billion lei as a result of the pre-financing in the first 4 months of the gross financing requirement for the year 2023. Thus, after the first 4 months of of the year, in the context of an increased appetite of the internal and external investment environments for government securities, 50.0% of the gross financing requirement for the year 2023 is already secured.
Social assistance expenses were 66.29 billion lei, an increase of 9.7% compared to the same period of the previous year. The evolution of social assistance expenses was mainly influenced by the increase from January 1, 2023, of the pension point by 12.5%, in accordance with the provisions of Government Emergency Ordinance no. 168/2022 regarding some fiscal-budgetary measures, the extension of some deadlines, as well as for the modification and completion of some normative acts, respectively from 1,586 lei to 1,785 lei, of the level of the social allowance for pensioners (minimum pension) from 1,000 lei to 1,125 lei , granting financial aid to pensioners of the public pension system, pensioners from the state military pension system and beneficiaries of rights provided by special laws paid by territorial pension houses/sectoral pension houses whose monthly income is less than or equal to 3,000 lei, as well as the granting of the 13th allowance for people with disabilities in the form of a compensatory allowance.
The social assistance expenses were also influenced by the payments borne from the state budget for the compensation of bills related to the consumption of electricity and natural gas, respectively for the first four months of 2023, they were in the amount of 1.46 billion lei, as and the increase in state allowances for children starting January 1, 2023.
Subsidy expenses were 6.78 billion lei, mainly, this amount represents subsidies for passenger transport, for supporting agricultural producers, as well as for the compensation scheme for the consumption of electricity and natural gas by non-domestic consumers (2, 11 billion lei) which represents 31.18% of total subsidies.
Other expenses were 2.89 billion lei, representing mainly sums related to the payment titles issued by the National Authority for the Restitution of Properties, according to the legislation in force, scholarships for pupils and students, support of cults, other civil compensations.
Expenditures on projects financed from non-reimbursable external funds (including subsidies from the European Union related to agriculture) were 15.21 billion lei, 34.8% higher compared to the same period of the previous year, according to Agerpres.
Investment expenses, which include capital expenses, as well as those related to development programs financed from internal and external sources, amounted to 19.24 billion lei, an increase of 58.0% compared to the same period of the previous year , when they were worth 12.18 billion lei. Also, there is an increase in the share of investments financed from external non-reimbursable funds after accession, representing 61.69% of the total expenditure for investments.