Budget revenues collection going well, investment spending not enough

The state’s investment spending fell by over 17% in the first
two months of the year compared with the similar period of 2010,
amounting to just 1.3 billion lei, while overall budget revenues
climbed 8.3% to 27.5 billion lei.

The state budget continued to see higher revenues collected in
February thanks to the significant increase in VAT collection, but
the authorities are putting off investment spending, which is
expected to pull the economy out of recession.

The Government boasted it had received the IMF’s consent to spend
on investments back in the beginning of the year, but figures do
not point to an encouraging progress of state investments.

Analysts have said on countless occasions that public investments
should not be cut, especially during this time when the private
sector is still ailing and the economy has yet to fully recover.
The right ways to meet the deficit target primarily entail cutting
non-essential spending, not reducing amounts allocated to
investments.
For the first quarter of the year, the maximum deficit target was
increased to 8 billion lei precisely in order to allocate higher
amounts to investments. Two months into the year, the deficit
reached 2.3 billion lei (0.43% of GDP).