Minister of Finance publishes 2021 budget law project for public debate

by Romanian Reporter - Friday, February 12, 2021 11:19 AM


Minister of Finance publishes 2021 budget law project for public debate

According to the budget law published Thursday evening, the state revenues will be about RON365 billion (32.67% of GDP) in 2021, while the expenses will reach RON445 billion (39.84% of GDP). The budgetary deficit will therefore be around RON80 billion, down by RON20 billion compared to last year.

The estimated deficit represents 7.16% of GDP for 2021, compared to 9.79% for the last year. The percentages are calculated on a cash deficit methodology, which is preferred by the Romanian authorities, as well as the International Monetary Fund.

This method counts the actual payments performed within a timeframe, as opposed to the ESA (European System of Accounts) methodology, used by the European Commission, which includes all cost commitments, even if the actual payments take place in a different fiscal period. When using the ESA methodology, the 2021 budget deficit increases up to 8.23%.

Budgetary deficits 2018-2024 (% of GDP). Source: Minister of Finance

Deficit 2018 2019 2020 2021 2022 2023 2024
ESA -2.94 -4.36 -9.10 -8.23 -6.36 -4.68 -2.90
Cash -2.82 -4.58 -9.79 -7.16 -5.84 -4.37 -2.89

The budget estimations are built on a 4.3% economic growth assumption for 2021, with a nominal GDP of RON1.116 billion and an average inflation rate of 2.4%.  The estimated growth rate for 2022-2024 is 4.9%, higher than the estimated average for EU countries (4.2% for Eurozone and 4.1% for all EU countries, as estimated for 2021).

Allocated budget for ministries and comparison to the previous year

  • Labour and Social Protection - 53.7 billion (+10.00%)
  • Education - 28.5 billion (+2.80%)
  • Agriculture - 25.9 billion (+10.00%)
  • Internal Affairs - 20.9 billion (+1.75%)
  • National Defence - 20 billion (+3.4%)
  • Health - 17.4 billion (-11.20%)
  • Transportation - 14.1 billion (+9.40%)
  • Development, Public Works and Administration - 7.15 billion (-19.19%)
  • Economy, Entrepreneurship, and Tourism - 6.58 billion (+186.00%)
  • Finance - 5.39 billion (-3.00%)
  • Justice - 4.68 billion (+2.50%)
  • Investments and European Projects - 2 billion (+11.30%)
  • Research and Innovation - 1.92 billion (+24.30%)
  • Environment, Waters, and Forests - 1.32 billion (+18.80%)
  • Foreign Affairs - 1.06 billion (-3.00%)
  • Culture - 894.2 million (+12.80%)
  • Energy - 889 million (+15.00%)
  • Youth and Sports - 543.1 million (+3.20%)

Photo: Florin Cîţu/ Facebook


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