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2017 budget draft based on 5.2pct economic growth and 2.96pct of GDP budget deficit
The 2017 budget draft is based on a 5.2 percent economic growth provided estimated for this year and above 5 percent over the entire 2018-2020 time frame, the (cash) budget deficit being forecast at 2.96 percent of the GDP, and the annual average inflation rate, at 1.4 percent, according to the report on the macroeconomic situation on 2017 and its projection on the 2018-2020 interval, released on the Public Finance Ministry's (MFP) website on Monday.
According to the document, the Gross Domestic Product (GDP) in 2017 is estimated at 815.198 billion lei, the revenues to the general consolidated budget, at 254.717 billion lei (with a 31.2 percent share in the GDP), and expenses, at 278.817 billion lei (34.2 percent share in the GDP), resulting in a 24.1 billion lei deficit (2.96 percent of the GDP). The average leu/euro exchange rate is estimated at 4.46 lei for one euro, and the monthly average salary earning, at 2,274 lei.
"The budget revenues projected for 2017 represent 31.2 percent of the GDP, 32.4 percent in 2018, and in 2020 they will represent 32.8 percent of the GDP, an evolution determined by the development of the macroeconomic indicators during the reference time frame, as well as by the normative acts adopted so far. The budget expenses projected for 2017 represent 34.2 percent of the GDP, and will reach 34.8 percent of the GDP in 2020, with a 0.6 percentage points increase, in the context in which investment expenses go up 2.6 percentage points in 2020 compared to 2017. (...) For 2017, a (cash) budget deficit level of 2.96 percent of the GDP is estimated, while the ESA deficit is estimated at 2.99 percent of the GDP, keeping within the under 3 percent of the GDP budget deficit target, according to the provisions of the Maastricht Treaty. On the 2018-2020 time frame, it will enter an adjustment trajectory starting 2018, being forecast to reach 2.53 percent of the GDP in 2019 and 2.02 percent of the GDP in 2020," the report mentions.
The documents points out that on the reference time frame there is estimated a deviation from the Medium-Term Budgetary Objective (MTO) established for Romania, namely 1 percent of the GDP, the structural deficit for 2017 being estimated at 2.92 percent of the GDP, in 2018, at 2.97 percent of the GDP, and following a declining trajectory starting with 2019 and 2020.
"Even in the context of having this risk, the deviation from the MTO would occur in the conditions of keeping, during the entire planning time frame, a sustainable level of the public debt, under 40 percent of the GDP," the report also says.