Budget, some sectors reduced

The budget numbers show that the financial support in proportion with the GDP will fall to the lowest levels, due to the difficult financial situation and the failure to collect revenues.

The economic slowdown and deterioration of finances are hitting the priority sectors of the economy and public investments. For the next year, the government investments in economy will fall with 69.7 billion ALL, or 690 million USD, from 738 million that it was in the plan that was reviewed this year and the 825 million USD of the government’s initial draft-budget.

The government investments will fall with 5.6% to 5%, in proportion with the GDP. Same as the investments, some key economic sectors, such as education, health and agriculture, will receive less money.

Official data indicate that the public funds for education will fall to 2.79%, from 2.91% that were in July 2011 and 3% in the initial plan. For the health system, the government planned 29.6 billion ALL for the initial budget of 2011, or 2.21% of the GDP.

This number was reduced to 2.18% for July, and next year it will be only 2.09%. Agriculture will remain the most discriminated sector of the public finances and will receive 0.48% of the GDP, from 0.59% that it was in the initial budget of 2010.

The fund cuts are due to another reason, besides the debt limits. The government’s fiscal efficiency is falling each year. The government approved the 2011 budget on November 2010, and predicted to collect 27.1 ALL for every 100 ALL from taxes and other sources that circulated from the economy. But in July, this number decreased to 26.1%. Next year it will be 0.5% smaller, or 25.6% of the GDP, the lowest in the last six years.

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