The Government on Wednesday passed a draft of the 2018 national budget that prioritises spending on healthcare, education and investment. According to a press statement released by the Government, the draft 2018 budget is built on a projection of a 5.5-percent economic growth, average annual inflation of 3.1 percent, an average exchange rate of 4.55 lei to the euro and a net average monthly wage income of 2,614 lei.
"The cash budget deficit is estimated at 2.97 percent of the Gross Domestic Product (GDP), while the ESA deficit is projected at 2.96 percent of GDP, with government deficit to be kept at below 3 percent of GDP, in line with the Maastricht Treaty provisions," according to the statement.
Under the draft, government's receipts are estimated at 287.5 billion lei, by 30.9 billion lei higher than in 2017, being for the first time that Romania's GDP is expected to pass the 200-billion-euro mark. "Out of the 30.9 billion lei worth of additional revenue, 21.1 billion lei will go to the healthcare spending, which will increase by 17 percent over 2017; the education spending, which will grow by 16 percent, and also to investment spending, which will see a 42-percent increase."
At the same time, the draft budget secures the necessary resources for granting holiday vouchers to all public workers, increasing by 9 percent the net minimum and average wages, both in the public and the private sectors, increasing by 10 percent public pensions from July 1 and the minimum pension by 23 percent. As far as people with disabilities are concerned, the budget provides for an increase by 30 percent in their monthly allowances from January 1. According to the press statement, one of the government's main goals for 2018 is to reduce unemployment to below 4 percent and to increase the number of full-time employees by over 200,000. "In this respect, the government will support the development of the Start-Up Nation programme for another 10,000 companies, mainly owned by young people. At the same time, 4.5 billion lei of the national budget is set aside for state aid programmes that will start next year, which include projects to increase Romania's exports by about 7.6 percent. "
The Romanian Government also says that it is meeting its commitments to Romania's NATO allies by allocating for the second consecutive year 2 percent of the GDP for defence spending and 53 million lei for an increase in the equity of defence companies; as far as the absorption of European funds goes, the Romanian Government has set to draw 28.4 billion lei (6.3 billion euros) in 2018, up 32 percent from 2017.
Government outlays in 2018 are estimated at 314.5 billion lei, which is 34.6 percent of the GDP. The draft national budget and the draft social security budget for 2018 will be submitted to Parliament for consideration and adoption.