06 12/2016

Moldovan government approves 2017 state budget draft law

The Cabinet of Ministers approved at its meeting today, draft on 2017 state budget. It results from economic growth of 3 per cent, an increase of 10 per cent in exports and imports by 9 per cent, on priorities the government's public policy and, but also, provisions of funding agreements with development partners.

Following the document, state budget revenues recorded an increase of 11 per cent, compared to 2016 approved budget, constituting 32.8 billion lei. The increase in income is due to a rate of 73.5 per cent increase in revenues from duties and taxes. The second most important factor is that of grants, totally amounting 3 billion lei, up by 47 per cent.

The state budget expenditures recorded a 9 per cent increase compared to approved 2016 budget, constituting 36.9 billion lei. Increased spending comes amid provided wage increases, additional spending reforms and debt settle.

The deficit is set in the amount of 4155.6 million lei. The main sources of financing state budget deficit are internal sources (including means of privatization of public assets, sale of assets of banks under liquidation proceedings, state securities net issuance) and external sources (net inflows from foreign borrowings for budgetary support and financing of projects from external sources).

For projects with external funding in draft state budget expenditures are expected to total volume of 2,735.5 million lei (7.4 per cent of total expenditures), with an increase from 2016 by 13.8 per cent.

There will commence 73 projects in 2017, the most important being: support program in sector of roads, infrastructure development in agriculture and construction of housing for disadvantaged people.

There will be renovated 21 schools and 40 pre-school institutions, renovated and equipped 12 centres of excellence in technical vocational schools, increased scholarships for 36 thousand pupils and students within the domain of education.

In 2017, there are provided allocations of 161.7 mln. lei for police reform and 49.2 mln. lei for completion of construction/reconstruction of capital investment objects in the context of justice sector reform strategy.

For chapter "Social protection", it is provided social security pension indexation of 6.8 per cent; increasing the size of allowance at childbirth; 50 per cent increase in allowance for young specialists, and indexing scholarships to inflation.

There will also be increased salaries for civil servants, judges, prosecutors. At the same time, salaries for employees of the Tax and Customs Service will double, to ensure a more efficient administration of the proceeds to the national budget and eliminate corruptive factor.

In this context, Prime Minister Pavel Filip said that the draft state budget law for 2017 stipulates perfect achievable goals. "It is a balanced and responsible budget draft, which takes into account the financing capacities of the Republic of Moldova for 2017," the prime minister said.

Draft law on 2017 state budget is to be submitted to the Parliament.