2008 National Budget by 20% larger, but still in deficit

The National Public Budget (NPB) for 2008 will provide for revenues of about 23.3 bln lei or by 3.9 bln lei or about 20% more than the revenues planned for this year. The expenditure will be 23.6 bln lei or by 3.9 bln lei or 20% more than in 2007. Minister of Finance Mihai Pop presented the draft NPB for 2008 at Wednesday’s meeting of the Government, which approved the draft state budget law, the draft state social insurance budget law and the draft law on the budget of state social insurance funds for 2008. The NPB deficit in 2008 will be about 284 mln lei or 0.5% of the Gross Domestic Product. This will not affect the macroeconomic stability of Moldova, the minister says. The state budget deficit will be 223.7 mln lei, the state social insurance budget – 19.5 mln lei, the budget of the territorial administrative units – 40.8 mln lei. The social expenses will make up 69.8% of the NPB expenditure. Compared with this year, the spending on science and innovation will grow by 41.6%, on transport by 39.1%, on justice by 38.3%. The state budget revenues will total about 14.4 bln lei, by 2.3 bln lei or 20.6% more than this year. The fiscal revenues will constitute 87.3% of the state budget revenues, while the non-fiscal revenues – 8.3%. The grants are projected to make up 4.4%. The state budget expenditure will add up to 14.6 bln lei, by 2.5 bln lei or 20.7% more than this year. An additional sum of 1.16 bln lei will be allocated for increasing the salary and personnel expenses, including 537.7 mln lei for the institutions financed from the state budget and 784.9 mln lei for the institutions financed from the budgets of the territorial administrative units. Mihai Pop says that among the key factors that contributed to larger allocations in the state budget for 2008 are the necessity of indexing the spending on goods and services to the level of prices, the higher electric power charges, the need to cover certain expenses that were earlier included in the state social insurance budget such as the summer rest of the children, activities to combat unemployment, the rise in military men’s pensions, the increase in spending as a result of the rise in the volume of preferential credits released to certain categories of people, the payment of compensations to the persons subjected to political repression and to the rural residents that want to get connected to the gas pipeline etc.