Rectifiction project: 2024 deficit reviewed at 6.94% of GDP, on the rise by 1.94%

The deficit of the general consolidated budget represents 6.94% of GDP, on the rise by 1.94%, according to the note accompanying the draft Emergency Order about the rectification of the 2024 state budget, released by the Finance Ministry.   “Incomes of the general consolidated budget go up by 42.67 billion lei, expenses of the general consolidated budget are higher by 60.106 billion lei, while the deficit of the general consolidated budget is 122.825 billion lei” the document says. 2024 budget was initially built on a budget deficit of 5% of GDP. According to the source, influences of the state budget incomes for 2024 are seen mainly in incomes from the tax on profit, that is a plus of 1.081 billion lei. The increase is due both to the evolution recorded from income tax profit compared to the estimated program, and from the inclusion of 720 million lei, a part of the 7.9 billion lei impact pointed out in Emergency order 107/2024 about fiscal-budget measures in the field of managing budget debts and the budget deficit for Romania's 2024 general consolidated budget.   Influences of 1.633 billion lei from other taxes on profit, incomes from capital from juridical persons, as a result of the negative evolution recorded by incomes from the income tax of small companies compared to the estimated program; taxes on income and salaries: + 1.537 billion lei , of which + 3.954 billion lei income tax and – 2.416 billion lei shares of the income tax.   According to the source mentioned, estimates increases from 2,000 to 3,000 lei of the monthly tax free level, in case of incomes from pensions.   There is a drop of 555.4 million lei drop of VAT, while there is a 2.501 billion lei in excises.   The project mentions that other taxes on goods and services will register a drop of 976.5 million lei. That is due to the negative evolution recorded from incomes compared to the estimated program.   There is an increase of 1.957 billion lei for social security contributions. The increase is due to the evolution recorded by incomes from insurance contributions compared to the estimated program and the inclusion of 1.140 billion lei, a part of the 7.9 billion lei impact pointed out in the government emergency order 107/2024 on managing budget debts and budget deficit in Romania's general consolidated budget for 2024.   According to the bill, there is a drop of 827.2 million lei non-fiscal incomes, this being caused by the negative evolution of incomes compared to the estimated program.   On the other hand, state budget expenses for 2024 will be higher by 41.709 billion lei.   The main influences of state budget expenses have in view: staff expenses, which go up by 8.799 billion lei, while expenses with goods and services are reduced by 294.3 million lei.   Also, expenses with interest rates grow by 3 billion lei, subsidies go up by 424.6 million lei, while transfers among public administration units register a plus of 1.521 billion lei, Other transfers go up by 330.9 million lei while social care expenses grow by 5.127 billion lei.   According to the project, amounts for projects financed from non refundable foreign funds between 2014-2020 record an increase by 1.361 billion lei, and the four projects with financing from non refundable foreign funds 2021-2027 have a plus of 19.822 billion lei.   “For other expenses there are increases by 2.041 billion lei; amounts for projects with financing from amounts representing PNRR non refundable financial assistance go up by 673.2 million lei; projects with financing from PNRR loans are reduced by 250 million lei; expenses from payable programs are reduced by 22.9 million lei; capital expenses are reduced by 1.848 billion lei,” says the Emergency Order about the rectificaiton of 2024 state budget.