Moldovan parliament has adopted the Law on the 2021 State Budget in the second reading with a deficit of almost 14 billion lei.
Late Wednesday night, 56 MPs from the PSRM and the “Pentru Moldova” platform including representatives of the SOR party and a group of former democrats who had previously left both the PDM and the “Pro Moldova” group, voted for the approval of the Law on the 2021 State Budget. The 2021 budget was adopted without discussions at the plenary meeting after hearing the conclusion of the relevant parliamentary commission, which had considered numerous amendments to the budget shortly before, also late Wednesday evening. The key budget parameters approved in the first reading did not change, and during the second reading, only part of the funds allocated for capital investments and repairs was redistributed, with the provision of additional financing to a number of settlements. In general, within the framework of the second reading of the Law on the 2021 State Budget, the MPs requested from the government additional funds totaling over 1.9 billion lei, but the Cabinet satisfied their requests in part, approving the redistribution of more than 303 million lei, and left this issue to the discretion of parliament. Some MPs from opposition factions, who hurriedly returned to the meeting they boycotted, were outraged at the fact that the majority decided to consider such important documents as fiscal policy and annual budgets in a hurry late in the evening, without the opposition being present and without discussing the opposition’s proposals. They also accused the ruling majority of distributing budget funds according to political criteria. As InfoMarket previously reported, the 2021 budget was drawn up taking into account the following indicators projected for the next year: 4.7% economic growth, 2.7% inflation, 12.6% increase in exports and 14.3% increase in imports. According to the project, the state budget revenues in 2021 will amount to 41 billion 415.4 million lei and will increase by 4.2 billion lei (+ 11.3%), compared with the approved refined indicators of 2020. The state budget expenditures in 2021 will amount to 55 billion 399.6 million lei, which is 2.2 billion lei (4.1%) more compared to the approved refined indicators for 2020. The budget deficit is estimated at 13 billion 984.2 million lei. Earlier, Deputy Prime Minister, Finance Minister Sergiu Puscuta noted that the main policy measures contained in the draft budget for 2021 relate to business support, increase in wages to public sector employees, increase in spending for healthcare and other industries, and social policy. So, in 2021, as part of business support measures, it is planned to continue subsidizing jobs and allocate 200 million lei for this. Subsidizing of interest on loans taken by economic agents from commercial banks will also continue, for which the state will allocate 30 million lei. To provide loans on preferential terms to small and medium-sized enterprises through commercial banks, 413 million lei have been envisaged. The Law on the 2021 State Budget provides for a gradual increase in the salaries of public sector employees. In particular, from January 1, 2021, the next stage of increasing the salary of doctors by 30% will take place. An increase in salaries for other state employees is also planned. In the field of social policy, many measures are envisaged to increase benefits for socially vulnerable groups of the population. Of the total expenditures, about 29.4 billion lei (53%) will be transfers to other budgets - social insurance, compulsory medical insurance funds, local budgets. 46% of the costs are expenditures on the implementation of various programs directly by the central authorities. According to the head of the Ministry of Finance, the costs of implementing projects financed from external sources in 2021 are planned at 3 billion lei (5.4% of the total state budget expenditures). In 2021, it is planned to implement more than 80 projects financed from external sources, of which the most important are the following: projects to support the repair of national roads - 819 million lei, projects to restore local roads - 334 million lei, education reform project in Moldova - 159 million lei, the project on emergency response to COVID-19 - 191 million lei, the project on urgent support to reduce the consequences of the coronavirus pandemic - 625 million lei, of which 413 million lei are for the provision of soft loans, and 212 million lei - for consolidating hospitals and equipping them with medical equipment. It is planned to allocate 73 million lei for the project on the construction of a new penitentiary institution in Chisinau, and 71 million lei - for the project to improve the water supply infrastructure. In addition, the Law on the 2021 State Budget provides for financing of current spending programs: Road Fund - 2 billion 490 million lei. 900 million lei is allocated for the Good Roads program. The National Fund for the Development of Agriculture and Rural Areas in 2021 will amount to 1.1 billion lei, the National Ecological Fund - 500 million lei (200 million lei more than this year), the National Fund for Regional Development - 220 million lei, the Vine and Wine Fund - 44.1 million lei, the Energy Efficiency Fund - 30 million lei. In general, capital expenditures are planned at 5.3 billion lei (+380.9 million lei by 2020), while capital investments are expected to amount to 1.6 billion lei (+49.4 million lei by 2020). Sergiu Puscuta stressed that out of the 2021 budget deficit of about 14 billion lei, the deficit for the main components will amount to 11.7 billion lei (83.5% of the total), and the deficit for projects financed from external sources will amount to 2.3 billion lei (16.5%). The main source of covering the state budget deficit next year will be external funds - the receipt of loans to support the budget and the implementation of projects financed from external sources. In particular, the matter concerns the financial support from the EU, IMF and WB. In addition, internal sources will be used to cover the deficit - funds from the sale of issued government securities, income from privatization of state property and funds retrieved from the stolen billion. The balance of the public debt as of December 31, 2021 is expected to amount to 84.9 billion lei, and its share in GDP at the end of 2021 will not exceed 38.3%, which will be about 4.6 percentage points higher than expected refined indicator at the end of 2020. // 17.12.2020 - InfoMarket.
