Field: Finances and financial capital

Subfield: Finances

Details:

State support in modern economies is consistent and is mainly fed by the fiscal system. Public revenues relative to GDP, the main source for the public budget, are vital for the sustainability of the activity of public institutions in the long term. The absence or insufficiency of these revenues affects directly the quality and availability of public services and can generate major budget deficits that in the short term can lead to the accumulation of unsustainable public debts. Furthermore, the level of public revenues is variable and depends strongly on economic cycles. Just like public expenditures, this indicator reflects the state’s dimension, and the degree and intensity of its intervention in economy: a low level of revenues cannot finance too much public expenditure, or else the state will accumulate important debt which in time will erode the development of the nation. In 2016, the mean public revenues relative to GDP in the EU were 44.9%, and in the Eurozone, 46.2%. Romania has the lowest level of public revenues (% of GDP) in the region and the EU: 31.7% of GDP (in 1995 the percentage was slightly higher: 32.1% of GDP).