Page 17 - Economic Outlook Romania 2019

2018 budget execution: revenues in line,

expenditures out of control

Budget execution pattern Rigid budget spending at Wage envelope nears 80% of
slightly different in 2018 58% of total spending fiscal revenues

1.5 100 85 (wage envelope + social benefits) /
1.0 12 8 7 7 (fiscal revenues + social contributions)
0.5 80 11 14 10 11 9 8 8 7 80 81.3 80.4 76.5 77.9
0.0 60 28 33 32 32 31 31 34 34 31
-0.5 28 34 33 75
40 70.3
-1.0 70 69.4 68.6
-1.5 20 65.1 66.1 66.5 65.3
-2.0 19 24 24 21 19 20 21 22 21 24 25 27 65
-2.5 0
-3.0 budget balance as % of GDP 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 60 55.5
-3.5
Wage envelope Goods and services 55
Interest Social benefits 50
2015 2016 2017 2018 Investments Others

Fiscal gimmicks worked, so Investments cut Higher taxes?
far… The composition of budget Hard to imagine another

Shift from public investments expenditures is pro-cyclical, government cutting down
to wage envelope, excise unsustainable and represent wages in public sector and

duties, special dividends. a vulnerability in case of an social benefits.
economic downturn.

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