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Ionut Dumitru about salary law: 2018 deficit could jump to 5.7%

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Ionut Dumitru, the president of Fiscal Council declared that the budget impact of salary law was double the one presented by the government, reaching 50-60 billion lei. Deficit could jump to 5.7% of GDP in 2018.

“From the first estimates we see that the impact of salary law is higher than communicated by the government. We have been told about an impact of 30 billion lei, cumulated for four years. As we can see now, the impact is almost double, about 50-60 billions. At present we do not have all data for an exact estimate. But in 2018, the impact is very big. Salaries of physicians and nurses will grow as of next year, in some cases by 150%. In education the increase id 50% compared to 2017 and 25% for the other social categories in the public sector. As of January 1, 2018, there will be an average increase of 40-50% for all state employees compared to 2017. The budget impact in 2018 could reach about 25 billion lei, that is 1.8% of GDP, net impact,” Ionut Dumitrescu told Mediafax.

He says it is hard to identify compensation measures for curbing budget deficit.

Figures speak themselves. It is beyond any imagination. When European Commission estimates showed a 3.9% deficit in 2018 without salary increases, we add 1.8% of GDP with the salary law. What compensation measures can we find to cover something like that?” Dumitru said.

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