​MOLDOVAN GOVERNMENT APPROVES BILL OF 2017 STATE BUDGET

On Monday, the Government of Moldova approved the draft Law on the 2017 State Budget to have revenues of 32,839 million lei (US$1.64 billion), expenditures of 36,994 million lei (US$1.84 billion) and a deficit of 4,155 million lei (US$207 million), which figure is 27 million lei smaller than for 2016.

Minister of Finance Octavian Armasu said presenting the document at the Government’s special meeting that the deficit will be covered mainly from external funding sources – the International Monetary Fund, the European Commission, the European Investment Bank (EIB) and the Government of Romania.

“We count on the European Commission grants to an amount of over 3.3 billion lei, which is 47% larger a sum compared with 2016”, said the minister.

According to him, the higher (by 73%) figure of State Budget revenues has been conditioned by expected greater tax revenues: next year, the taxes will replenish the Budget by 28.7 billion lei, which will constitute approximately 86.5% of all taxes.

“As for the Budget’s expenditures side, nearly 44% of them will be channeled to the social insurance budget (5.5 billion lei), the health insurance budget (2.59 billion lei), and to local budgets (8,147 million lei)”, said Octavian Armasu.

For education needs, including for working out and implementing advanced education standards, the Government has projected 10 billion lei, plus another 110 million lei – for repairing 40 schools and kindergartens administered by local governance organs.

900 million lei has been projected as subventions for agrarians, including 231 million lei within the framework of the European Neighborhood Program for Agriculture and Rural Development (ENPARD).

The budget of the National Fund for Regional Development has been planned at the level of 200 million lei, the Energy Efficiency Fund – at 100 million lei, the Vine and Wine Fund – 42.2 million lei, the National Environment Fund – 271.7 million lei, the Fund for Social Support of the Population – 92 million lei, and the capital investments – 1.79 billion lei.

According to the bill, the country’s gross domestic product will grow in 2017 by 3% to reach 142.8 billion lei (US$7.14 billion). Inflation is forecast at 4.4%, and the national currency’s exchange rate – at MDL 20.4 to US$1.

Prime Minister Pavel Filip stated at the Government meeting that Moldova has managed to overcome the financial crisis that began in 2015.

“The proposed Budget bill has been balanced and prepared with an account of the current financial possibilities of the State”, he said.

According to preliminary data, the country’s domestic debt in 2017 will mark 21,251 million lei i.e. will be 511 million lei smaller than in 2016. The external debt will grow up by approximately 7,142 million lei – up to 39,564 million lei (US$1,893 million).