The most recent version of the draft state budget discussed on Friday by the Government, which is also to be analysed by CSAT on the national defence component, relies on estimated revenues of 117,087 billion lei, by 600 million lei above the first version of the budget drafted by the Ministry of Finance.
Budget expenditures increase by an equivalent amount, up to 150.2 billion lei.
The budget proposal maintains the economic growth estimate at 5.2% and a record annual revenue increase of 14%.
Noteworthy:
- Most of the allocations to the budget affect the social insurance budget, from which 500 million lei have been transferred
- The budget of the Ministry of Defence increased to 2% of GDP, as the commitment appropriations have been excluded – the initial version based on revenue of 11.02 billion lei and additional commitment appropriations of 7.6 billion lei was anyway false: commitment appropriations can only be contracted under multi-annual programs for defence equipment, so the money could not be spent all in 2017 to equal the 2% threshold
- The revenues for the healthcare and education sectors have been artificially increased, as they have been reported under the estimated budget executions for 2016 that decreased in the latter version compared to the first version, which leads to a higher percentage increase for the 2 ministries
The Fiscal Council issued Friday a preliminary analysis of the draft budget which mentions „a potential overestimation of the budget revenues and a probable underestimation of the current expenditures,” which is likely to „significantly tip the balance of risks” towards a deficit registered in the budget execution that would be higher than estimated, in the absence of some corrective measures.
The draft budget based on the actual structure has also been encouraged by the change of statistics recently made by the National Commission for Prognosis.
In the following, we present the main details of the latest 2017 draft budget:
Ministry of Defence (MApN): the budget follows the commitment regarding the 2% of GDP; the Ministry receives an additional 5.3 billion lei, by 48% more than in the draft version announced last week and reaches to 16.32 billion lei.
The commitment appropriations have been maintained, but are no longer considered for the share of GDP allocated to defence.
The Ministry of Internal Affairs receives over 100 million lei more than in the initial budget version, up to 11.287 billion lei, but by 3.3% below the 2016 preliminary budget execution.
The budget of SRI has been affected, as it receives 1.7 billion lei, down by 13.3% (200 million lei) compared to the previous allocation and 9.41% less than the execution estimated for 2016.
The Presidential Administration receives in turn 41 million lei, down by 5 million lei compared to the initial version and 15% less than the 2016 preliminary execution.
The Ministry of Regional Development also receives less by 200 million lei (-2.8%) compared to the initial 2017 draft budget, namely up to 6.9 billion lei. That means a 16.9% decrease compared to the 2016 preliminary execution.
The Ministry of Education keeps the allocation of 8.24 billion lei, 25.97% more than in the preliminary 2016 execution – 6.54 billion lei.
In the first budget version, the 2016 preliminary execution amounted to 8.94 billion lei, compared to which the 2017 draft budget was 7.89% lower.
The Ministry of Health receives an additional amount of 130 million lei compared to the initial version and increases by 16.6% compared to last year’s preliminary execution.
This budget estimate is, though, by 550 million lei below the last week’s budget version.
