The focus of the Romania budget 2012 will be on honoring the commitments it made to secure a financial aid from the International Monetary Fund (IMF).
Highlights of Romania Budget 2012:
The 2012 Romania budget will focus on jobs and investment and adopt a practical and responsible approach towards achieving its targets.
Emile Boc, the Prime Minister of Romania, has stated that pensions and salaries of government employees will not be decreased in 2012.
He has further stated that if the economic condition of Europe does not get any worse their salaries could even be increased.
Boc also revealed that in 2012 the government will aim to attract a minimum of 6 billion euros from the European Union.
The centrist national government of Romania has estimated that in 2012 the economy will grow at a rate ranging within 1.8 to 2.3 percent.
The investments made by the Romanian government will be lesser in 2012 fiscal compared to the 2011 fiscal.
But this is supposed to be compensated by 50 percent usage of funds from the EU.
According to deputy finance minister of Romania, Gheorghe Ghergia, the government will aim to take 13.2 billion euros in 2012 to deal with its budgetary deficit; 2.4 billion euros are supposed to be borrowed for debt payments.
The IMF has recently stated that the Romanian economy will grow by approximately 2.1 percent of its Gross Domestic Product (GDP). In 2011 Romania s economic growth has been fairly slow as well, with a rate of 1.5 percent of the GDP. Earlier it had been planned that the Romanian economy will grow by 1.7 and 2.7 percent of the GDP in 2012 fiscal.
As per agreements between the IMF and the national government, Romania will aim to keep its budgetary deficit to 2.1 percent of the GDP in 2012 compared to 4.4% in 2011 fiscal. It had previously planned to keep fiscal deficit to 1.9 percent of the GDP but experts had predicted that it could go up to 2.5 percent of the Gross Domestic Product, based on the economic situation of the European Union.
The Romanian President, Traian Basescu, had also stated that if the debts of various publicly held enterprises were taken into account the deficit could run up to 3 percent of the GDP.
Romania Economy The Future:
The International Monetary Fund wants the Romanian government to continue its trend of strict reductions in public expenditure but experts feel that this could hamper its overall economic growth.
In July 2011 the national government had increased the rates of Value Added Taxes to 24 percent, which is 5 percent more than its initial rate. Major retrenchment was carried across different government sectors and reduced governmental wages by th.
The Romanian government has justified these decisions by stating that it can only keep the economy operational by observing its commitments to the IMF, the World Bank and the European Union.
The critics of the national government have reasoned that Romania was relying only on the IMF for financial assistance while the other European countries were looking to other areas for help.