Government approves drafts of revising state budget and social security budget for 2012

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The Government on Saturday, October 27, approved the emergency ordinance drafts on revising the state budget and the social security budget for 2012.

 The press attended the entire meeting and the ministers of the Ponta Cabinet made no remark on the two drafts of the norm setting documents mentioned before.

The second budget revision for 2012 is based on an economic growth revised downwards to 1 percent from the 1.2 percent level considered for the first budget revision in August 2012, whereas the initial budget was built on a 1.8-2.3 percent increase, according to the ordinance draft on the budget revision, which was published by the Ministry of Public Finance.

The deficit of the consolidated general budget stays at 13.66 billion lei (about 2.999 billion euros at the current exchange rate), that is 2.2 percent of the gross domestic product.

The European Bank for Reconstruction and Development (EBRD) revised downwards the estimates of the evolution of Romania’s economy in 2012, because of the crisis in the Eurozone, according to the most recent revised prognoses of the EBRD. Romania’s gross domestic product is said to register an only 0.5 percent growth this year from 0.8 percent as estimated by the EBRD in July.

The additional receipts and the lower expenses with the public debt make it possible for the Government to carry out this budget revision, the second one this year, up by 1.354 billion lei.

The public debt-like expenses, which are included in the budget, are predicted to go down by almost 1.480 billion lei and fill a financing gap of the state budget amounting to 1.402 billion lei, a financing gap amounting to 74.8 million lei of the social security budget and a smaller one, 4 million lei, of the unemployment budget.

Under the revision the overall increase by 1.354 billion lei of the expenses of the consolidated general budget refers to a 307.7 million lei increase in the state budget expenses, a 2.55 billion lei addition to the local budgets, a 70 million lei growth of the social security budget, a 136.4 million lei addition to the National Health Insurance Fund, a 2.5 million lei increase in the expenses of the National Company of National Motorways and Roads of Romania. Resources have been found with the unemployment budget, where expenses amounting to 201 million lei are to be slashed.

The second budget revision for 2012 is based on an economic growth revised downwards to 1 percent from the 1.2 percent level considered for the first budget revision in August 2012 whereas the initial budget was built on a 1.8-2.3 percent growth.

The revenues of the state budget are planned to do down by 1.095 billion lei and the state budget expenses go up by 307.7 million lei.

The second budget revision also refers to the continuation of the precautionary stand-by agreement between Romania ad the International Monetary Fund that came into force in late March 2011, which stipulates the continuation of the fiscal consolidation process and of the structural reforms that started under the previous programme in order to stimulate the economic growth and the participation of the private sector in economy, the necessity to ensure the funds necessary for some main loan releasing authorities with a view to making their activity run normally till the end of the year, the necessity to ensure additional funds with a view to supporting the investment projects, the sums of money necessary for financing the expenses incurred with the rights of the personal companions of seriously disabled people or the monthly pays, the funds necessary for the normal activity of the administrative and territorial units till the end of the ear, the funds necessary for paying the arrears in certain fields of activity as well as the sums of money necessary for a good absorption of the European funds.

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