Government Spent a Record Sum to Repay External Debts

In the first 10 months of 2023, the total revenues of the national public budget (NPB) with consolidated transfers totaled 82.5 billion lei, up by 12.8% (9.35 billion lei) compared to the same period last year. Data from the Finance Ministry show that the value-added tax (VAT) remains the main source of revenues, but its revenues have increased by only 3.6% since the beginning of this year, amounting to about 24.66 billion lei. Revenue from VAT on imported goods actually fell by 2.5% to 19.12 billion. Other important sources of NPB revenues, such as compulsory state social insurance contributions, increased by 16.4%, to 17.37 billion lei, income tax revenues rose by 14.1%, to 13.39 billion lei, while excise duties increased by 23.8%, to about 8 billion lei. As for the expenditures, the biggest expenses are for social protection - about 40.55% of the entire national public budget, which increased by 19.8% to 37.27 billion lei in the first half of the year. Next come the education expenses - with a 15.15% share and health care - with 13.53%. The most significant growth of the expenditures is observed in the section “National Defence” - about two times, but their share barely exceeded 1% of the national budget. According to the Finance Ministry, the execution of the national public budget in October 2023 ended with a shortage of 9.4 billion lei, about 2.6 times higher than in the same period of 2022. The main sources of financing the huge budget shortage were external sources. Thus, the inflow of external loans totaled a huge amount of 14.29 billion lei, 40% higher than in the same period of 2022. According to the Finance Ministry, the bulk of this huge amount of borrowing went to repay external debts taken earlier. We are talking about an amount of 8.38 billion lei, almost 5 times more than in the same period of 2022, reaching about 3% of the gross domestic product.