Draft budget 2019/5.5pct economic growth, 2.8pct annual average inflation, 2.55pct cash deficit

The state budget for 2019 is built on a 1.02 billion lei gross domestic product representing a 5.5pct economic growth against 2018, a 2.8pct annual average inflation and an estimated 2.55pct budget deficit of the GDP (cash) and a 2.57pct of the GDP (ESA), according to data released on Thursday night by the Public Finance Ministry (MFP). 

In 2018, the GDP saw 949.6 billion lei, according to MFP data, representing a 4.5pct increase against 2017, and the annual average inflation parked at 4.63pct. 

Unemployment rate will slightly dip in 2019 to 3.2pct from 3.31pct in 2018, meaning that at end- 2019 the number of the unemployed will count for 287k people. 

The net average income grows to 3,085 lei in 2019, from 2,685 lei in 2018, and the average number of the employees is estimated to go up to 6.655 million people, from 6.525 million people in 2018. 

The revenues of the consolidated general budget for 2019 are projected at 341.4 billion lei, respectively 33.4pct of the GDP. According to estimates, the largest revenues are foreseen for the social insurance contributions - 11.5pct of the GDP, a 6.8pct VAT collection, excises - 3pct of the GDP, taxes on income and pay - 2.3pct of the GDP. 

The spending of the consolidated general budget for 2019 is estimated at 367.5 billion lei, representing 35.9pct of the GDP. The largest share in the GDP is represented by the social care spending - estimated at 109.8 billion lei, respectively 10.7pct of the GDP (the same share as in 2018) and the staff spending - amounting to 102.5 billion lei (10pct of the GDP), yet on the medium term (2019 - 2021) a dropping trajectory of their share in the GDP is forecast. The spending with the goods and services are estimated at 46.5 billion lei (4.5pct of the GDP), up by 1.8 billion lei against 2018. Out of this increase, 1.5 billion lei is the budget of the National Single Fund of the Social Health Insurance. 

According to the MFP, the main targets of the state budget for 2019 are the backing of the public investment, the education and health. 

The spending with the investment are forecast at 46.8 billion lei (4.57pct of the GDP), up by 12.5 billion against 2018. 

The expenditure with the public debt interest rates, estimated at 13.5 billion lei, see a smaller share in the GDP, of 1.3pct for 2019 vs 1.4pct in 2018. 

The Health care is added rd 5 billion lei vs 2018, which means a 12pct growth. 

The Education receives in addition to the share of 2018 some 9.8 billion lei, meaning a 47pct up. 

The state budget for 2019 has also covered a 2pct of the GDP allocation for the Defence sector, as assumed by Romania to their NATO partners. 

"The necessary amounts of money were ensured for the pensions' increase by 15pct starting with September 2019, which is a 6.5 billion lei in addition to the state security budget. 

For the support of the business milieu, the state budget for 2019 includes a series of commitment loans for several programmes.