Budget collections in January-February show financial discipline should be substantially improved

The revenues collected into the national public budget in January-February 2008 rose by only 1.6% compared with the corresponding period last year and by 3.1% compared with the projections. If the growth rate remains at the same level, the situation will force the Ministry of Finance to demand a strict discipline from budget fulfillers, consider analysts of the independent center “Expert-Grup”. According to them, the Ministry of Finance is the first that should show financial discipline. The experts criticize the ministry for the fact that it considers the identification of resources for covering the costs of the activities dedicated to the Year of Youth a priority at a time when such expenses are not planned in the budget. As to the macroeconomic developments in the first months of 2008, the analysts of Expert-Grup say that the biggest surprise was the appreciation of the Moldovan leu, whose exchange rate was 10 lei per one US dollar at mid-March. They explain it by the depreciation of the dollar on the international markets, by the 90% rise in remittances from individuals working abroad compared with last year and by the 3% increase in consumer prices. The monthly inflation in January and February was twofold higher (15%) than it was necessary to maintain the yearly rate within the set limits, the analysts say. The rise in electricity and gas prices have led to the increase in consumer prices and dispelled the optimism of the central bank, which initially said that such phenomena do not occur each month and the consequences will not be serious. In this connection, the central bank raised the financing rate and the norm of obligatorily reserves of the banks by 1%, the last measure being an “administrative” one. The experts described yet as positive the decision to transfer the balances from the accounts of the National Social Insurance House, the National Obligatory Health Insurance Company and of the budgets of the territorial-administrative units into a single account of the State Treasury of the National Bank. In 2008, the central bank can also use an efficient instrument of sterilizing the money supply by converting the state loans taken earlier by the National Bank into state securities.