Budget rectification ordinance published with Official Journal

The Government Ordinance on the budget rectification, the second one in 2009 was published in the Official Journal on Monday.
The revenues to state budget on 2009 downsized by 7.09 billion lei, while expenditures grew by 5 billion lei, the deficit of the state budget going up by over 123 billion lei.

Compared to the initial projection of the budget, revenues from value added tax (VAT) went down by 4.237 billion lei, an estimate based on the economic downturn in the main branches (8 percent in industry, 16.9 percent in constructions, services sector – 6.2 percent, agriculture – 12 percent).

Revenues from tax on profit are scheduled to adjust downwards by 443 million lei, mainly because of the cut in turnover and reduction of labour productivity in economy and revenues from excises by 362.2 million le i, following the 2-percent cut in processing industry (production of tobacco products).

Because of the unfavourable foreign climate, Romania is faced with a more severe economic recession than initially estimated. Although the enforcement of the anti-crisis programme has managed to lead to the normalization of the financial conditions, the contraction of the economic activity is expected to exceed the initial estimates.

For the entire year 2009 the economic slump is expected to stand at -8% up to -8.5%, so that the gross domestic product is expected to report a nominal value of 497,325 billion lei.

Under the current economic circumstances, in 2009 revenues to the aggregate consolidated budget are estimated to downs ize by 17.4 billion lei because of the decrease in the revenues derived from VAT, social contributions and non-fiscal revenues.

Allowing for the significant cut in budget revenues, the budget rectification was necessary, because of the changes that came up in economy. The level of the aggregate consolidated budget has been established at 7.3 percent of the GDP.

The fall of revenues derived from social contributions, as well as the decline of indicators that were the basis for the budget of state social insurance and the budget of unemployment insurance policies, such as the rise in the number of unemployed following the reorganization of the main business operators’ activities and the diminution of the gross wage required the establishment of the legal framework able to ensure budget funds necessary for the entire disbursement and in due time of the public pensions, unemployment benefits, shares of social contributions due to these benefits.

The budgets of the Ministry of Administration and the Interior (MAI), Ministry of Labour, Family and Social Solidarity, Ministry of Transport and Infrastructure, Justice Ministry and Ministry of Economy were supplemented by the budget rectification, whereas the budgets of other public institutions were cut down.

The expenditures of the state budget grew following the rectification by 5.001 billion lei by the supplementation of revenues for the Ministry of Labour, Family and Social Solidarity with 5.362 billion lei, Ministry of Transport and Infrastructure, with 756.5 million lei, Economy Ministry – 169.87 million lei, Ministry of Interior and Administration – 66.153 million lei and Justice Ministry – 61.625 million lei.

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