The Government on Wednesday adopted its fiscal-budgetary strategy until 2014, which does not include the contribution reduction. “We cannot afford to make such a decision at the moment, the strategy includes only the measures discussed with the IMF,” said Ialomitianu.
According to the minister, the fiscal-budgetary strategy provides reducing personnel expenses to 7.2% of the gross domestic product in 2012, to 7.08% in 2013 and to 6.79% in 2014, while raising investment allocations from 43 billion lei (EUR10 billion) in 2012 to RON49.5 billion in 2013 and to RON55.7 billion in 2014.
The budget deficit targets are 3% in 2012, 2.5% in 2013 and 2.2% in 2014.
Budget revenues are seen up 9% in 2012 from 2011, while revenues are forecast to increase by 5%, said the minister.
In 2012, the GDP will be worth RON588 billion, compared to RON543 billion in 2011.
The fiscal-budgetary strategy, as drafted in April, stated that the social security contributions paid by employers would be reduced by two percentage points in the second half of the year. This “fiscal relaxation,” it was argued, would help reduce evasion on the labor market and encourage voluntary compliance.
Ialomitianu himself said at the time that the ministry was considering reducing the contributions, but that such a decision would only be made with the IMF and European Commission. IMF officials said, however, that it could happen only if Romania could guarantee its ability to respect the fiscal targets of 2011 and 2012. (EUR1=RON4.262)