Budget deficit up to 1.19 pct of GDP after Q1 2022

The budget deficit climbed to 1.19 pct of gross domestic product after the first quarter of this year, from 0.72 pct of GDP in the first two months, according to data released by the Ministry of Public Finance on Wednesday.The negative balance of the consolidated budget amounted to 15.7 billion RON in the first three months of 2022, compared to 9.51 billion RON in January and February.Compared to the first quarter of last year, the budget deficit decreased by 0.05 percentage points, from 1.24 pct of GDP to 1.19 pct of GDP."The execution of the general consolidated budget in the first three months of 2022 ended with a deficit of 15.7 billion RON. Expressed as a percentage of gross domestic product, the budget deficit decreased by 0.05 percentage points for the first three months of 2022 compared to the same period of 2021, from 1.24 pct of GDP to 1.19 pct of GDP. The evolution is explained by the increase in total revenues by 0.66 percentage points of GDP (mainly VAT receipts and other taxes on goods and services), while budgetary expenditures recorded an advance of 0.61 percentage points of GDP (mainly expenditures on social assistance and European funds)," states the Ministry of Finance.The revenues of the general consolidated budget amounted to 104.06 billion RON in the first quarter of 2022, 21.3 pct above the level collected in the same period of last year.Insurance contributions recorded 33.30 billion RON in the first quarter, up by 9.2% (y/y).Net VAT receipts amounted to 23.62 billion RON in the first quarter, registering an increase of 39.3 pct (y/y).Revenues from excise duties amounted to 8.36 billion RON in the first three months, increasing by 7.9 pct (y/y).The revenues from the payroll and income tax totalled 7.54 billion RON in the first three months, recording an increase of 11.7 pct (y/y).Profit tax receipts amounted to one billion RON in the first three months, down by 73.9 pct (y/y).Other taxes and taxes on goods and services totalled 4.82 billion RON in the first three months, registering a significant advance compared to the previous year (+3.72 billion RON), mainly on account of additional revenues from the energy sector.Non-fiscal revenues amounted to 8.45 billion RON in the first quarter, registering an increase of 34.3 pct (y/y), supported by the advance of receipts from dividends, oil royalties and payments from net incomes of the BNR.The amounts reimbursed by the European Union on account of payments made and donations totalled 8.39 billion RON in the first three months, increasing by 67.4 pct (y/y).The expenditures of the general consolidated budget in the amount of 119.75 billion RON increased in nominal terms by 19.2 pct compared to the same period of the previous year.Social assistance expenditures amounted to 46.15 billion RON, up by 20.9 pct compared to the same period of the previous year.At the same time, it reflects the increase of the state allowance for children, to 600 RON (as of January 1, 2022) for children aged up to 2 years or up to 3 years, in the case of children with disabilities. At the same time, children with disabilities benefit from this amount until they reach the age of 18. Also, the state allowance for children aged between 2 years and 18 years was increased to 243 RON, but also for young people over 18 years old who attend high school or vocational courses, until their completion, including for those with disabilities who follow a form of pre-university education provided by law, but not later than the age of 26.Personnel expenditures amounted to 28.34 billion RON, up by 2.2 pct compared to the same period of the previous year.Expenditures on goods and services amounted to 14.94 billion RON, up by 14.9 pct compared to the same period of the previous year.The interest expenses amounted to 5.76 billion RON.The expenditures with subsidies amounted to 2.99 billion RON, mainly this amount representing subsidies for the passenger transport, as well as for supporting agricultural producers.Other expenses were of 1.73 billion RON, representing amounts related to payment titles issued by the National Authority for Property Restitution, according to the legislation in force, scholarships for students and students, other civil compensations, as well as allowances granted to parents for the supervision of children during the temporary closure of educational units.Expenditures on projects financed from non-reimbursable external funds (including subsidies from the European Union related to agriculture) amounted to 9.31 billion RON, 70 pct higher compared to the previous year.Investment expenditures, which include capital expenditures, as well as those related to development programs financed from internal and external sources, amounted to 8.41 billion RON, up by 4.3 pct compared to the same period of the previous year when they were worth 8.06 billion RON.The 2022 budget was built on a cash budget deficit estimated at 5.8 pct of GDP and ESA (European System of Accounts) deficit estimated at 6.2 pct of GDP.On the other hand, the Romanian authorities maintain their GDP growth estimate at about 4 pct for this year, and the international financial institutions have significantly revised down their GDP growth forecast, up to about 2 pct.