A new budget adjustment

The Government on Thursday adopted the second and final budget adjustment for this year. The budget will cover mandatory expenses, such as operational costs of all state institutions until the end of the year, social welfare benefits as well as salaries. Additional funds were redistributed to programs conducted by budget administrators with an impact on the economy and with a view to supporting the population and businesses. At the same time, the budget adjustment provides funding for state aid given to farmers whose crops were affected by draught in 2021. The budget ensures the necessary funds for ongoing European projects. Most funds will go to the Finance, Labor, Agriculture and Economy ministries, while the Energy, Interior, Health and Transport ministries will get less funding. According to the autumn forecast underlying the adjustment, budget revenues increased by some 100 million EUR, although so did expenses. The budget deficit stands at some 16 billion EUR, a slight drop accounting for 5.74% of the GDP, compared to the previous estimate of 5.84%. Finance Minister Adrian Câciu explained:

"We restructured expenses wherever we found it necessary to supplement the budget, where budget administrators did not honor their committments in their financial plans".

On the other hand, Prime Minister Nicolae Ciucă argues that European financial agencies claim Romania reported economic growth in the third quarter of 2022, and there are no clear signs our country might face a recession.

"Obviously, to be honest, we very much depend on the economic context and on our partners. Some of these problems are bound to affect Romanian economy too. Therefore, we need to continue to come up with measures and decisions that should allow us to continue to support investments. Caution and balance are advised".

The budget also addresses vulnerable categories of the population. Prime Minister Ciucă announced the government will earmark 800-900 million EUR worth of European funds to vulnerable categories to help them get safely through the winter, both this year and the next. The funds will be disbursed as state subsidies for the payment of energy, heat and firewood. (VP)