Moldovan state budget for 2017 to be rectified

Chisinau, 08 February /MOLDPRES/ – The Government approved today a draft amendment to budget that increases the income and expenditure of 385.9 million lei each, compared to the initial program.

Finance Minister Octavian Armasu said at the presentation of the budget rectification that the budgetary indicators adjustment is determined by the allocation to local budgets of part of the road fund and the creation of a liquidity buffers in order to improve debt management.

The budget deficit will not be changed. On the other hand, the Finance Ministry proposes to increase the balance of domestic debt by 2 billion lei, from 21251.6 million lei, as initially planned, to 23251.6 million lei.

"This action was consulted with IMF and external partners," said Octavian Armasu.

The increase of the state budget revenues by 385.9 million lei is proposed on the account of increasing the fee for using roads by motor vehicles registered in Moldova, which were originally estimated revenues to local budgets. As to the expenditures, it is proposed to decrease allocations to the Ministry of Transports and Road Infrastructure by 350.3 million lei, as a result of road fund allocation by local authorities of the second level for the management of the local public roads.

At the same time it will increase by 385.9 million lei transfers from the state budget to local budgets to the exclusion of the Law on Local Public Finance breakdowns from the road use tax. There follows to be made further adjustments in smaller amounts.

The Ministry of Finance explained that the creation of a reserve of liquidity (cash buffer) is to avoid seasonal pressures in providing financing sources to cover budget deficit, but also to reduce the risk of refinancing debt. The change imposes increasing domestic debt, thus, says Minister of Finance, this does not imply costs for debt servicing. The cash reserves resulting from the sale of state securities will be deposited in a special account at the National Bank of Moldova.

The draft amendment to the Law on State Budget for 2017 will be submitted to Parliament for consideration.

(Reporter V. Bercu, editor M. Jantovan)