2012 State Budget is socially-oriented, analyst

The 2012 State Budget is socially-oriented, with over 42% of government spending being reserved for social needs, and this indicates that Moldova's population remains dependent on the state's social assistance, economic analyst Iurie Gotisan told Info-Prim Neo. “On one hand, this is not a bad thing really. The government apparently takes care of its citizens. However, {per capita} spending is insignificant, which is due to the national economic system's low output capacity. The path that continues to be followed is social salaries, rather than structural policies for social reform”, said Iurie Gotisan. The analyst remarked that the shares allocated to state institutions remained mostly unchanged from this year. Larger budgets for 2012 were allotted to the Education Ministry and the Ministry of Transportation and Roads. “The authorities were overly optimistic when basing the Budget on a predicted economic growth of 4.5%. This target is too ambitious for our economy today, as it is for any economy in the region or in Europe”, suggested Iurie Gotisan. The analyst noted that the Customs Service was tasked to yield about 63% of the Budget's tax revenues in proceeds from customs duties, excises and the like, which indicated that the authorities continued to count on growing foreign trade. “Revenues expected from the Tax Service represent roughly 27% of the total, which is an indicator that our production sector is seriously falling behind. In more or less developed economies this rate represents 60 to 40. This is the model of a viable economy which can support a solid social sector”, said the analyst. He further suggested that fighting tax evasion, which is estimated to represent up to 12% of Moldova's GDP, could be a solution to obtain additional resources. The Government on November 25 approved the draft 2012 State Budget Law, with incomes standing at 21.36 billion lei, up 11.9% on 2011, spending at 22.16 billion lei, and a resulting deficit of 0.8 billion lei.

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