Budget revision secures balance for BudgetPublish date: 29-04-2009
The revision of the 2009 Budget secures a balance for the Budget and indicates the seriousness of the Government, Finance Minister Gheorghe Pogea told a plenary session of Parliament on Tuesday.
The draft law approving Government's ordinance concerning the revision of the 2009 Budget and regulating other financial and banking matters cleared Parliament on Tuesday without any amendment tabled by the Opposition.
The minister explained that the Budget rectification occurs less than two months after Parliament approved the Budget, but such a measure is required any time the internal and external economic conditions modify the Government's revenues or spending. He added that the 2009 Budget proposed by the outgoing Government was built on a projected 6-percent economic growth and public revenues of 38.3 percent of the Gross Domestic Product (GDP), which the incumbent Government had to reduce to a 2.5-percent economic growth and revenues of 33.5 percent of the GDP, and the revision took a 4-percent economic decline into consideration.
The 2009 Budget rectification provides for a Government deficit of 4.6 percent of the GDP, compared with a 2 percent of the GDP, as initially projected in the first draft Budget, and the new Budget is now built on a projected economic decline of 4 percent of the GDP, and a GDP of RON 531.25 billion.
After rectification, the Government's receipts are standing at RON 174.9 billion, which is 32.9 percent of the GDP, down RON 18 billion from the initial projection. Government's aggregate spending is now standing at RON 199.3 billion, or 37.5 percent of the GDP, while the Government deficit is projected at RON 24.3 billion, or 4.6 percent of the GDP.
The revised Budget continues to cover social security expenses, while staff costs have been cut down to RON 41.5 billion, or 7.8 percent of the GDP; goods and services acquisitions are now down at RON 27 billion, or nearly 5 percent of the GDP, while interest spending has increased because of the new market conditions, by more than RON 1.8 billion, to 1.58 percent of the GDP.
Pogea also explained that an adjustment of the aggregate Budget was required of 1.1 percent of the GDP, 0.85 percent by diminishing public spending and 0.25 percent by increasing public revenues.
Government's aggregate revenues are diminished by RON 18.797 billion, and Government spending by RON 6.22 billion. Government's revenues are now RON 12.073 billion short of the initial projections; local administration budgets are RON 2.358 billion less. Revenues from the social security contributions are expected to decrease by RON 234.9 billion, while revenues from unemployment contributions will be RON 131.1 million short of the initial projections, and the healthcare insurance contributions have been downwardly adjusted by RON 594.5 million.
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