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The Fiscal Council estimates, in an average scenario, an economic drop of 4-6% this year and a budgetary deficit of 8-9%
The Fiscal Council estimates in an average scenario an economic drop of 4-6% this year and a budgetary deficit of 8-9%, stated the chairman of the Fiscal Council Daniel Daianu in a debate
‘In the Fiscal Council we had doubts about 1.9% ( the official estimate for economic drop). We prefer an average scenario with a drop of 4-6%; there is a more severe one. Why 1.9% as not a plausible decline? Because we have a big drop of production. We have a big drop in exports. We much depend on the European production chains. We have started with a big handicap. Structural deficit of the public budget – very big. So, before the pandemics. Primary deficit (before the debt service) which is the highest in the EU.And much difficulty in financing the economy – the necessary for financing is very big. We have a maneuvering space – very limited to calm down the effects of the crisis. And from here the questions connected to what the deficits will be this year and in 2021 as well.At the Fiscal Council we work with a space of 8-9% budgetary deficit for the economic drop between 4 and 6% and deficit of 9 to 10.4% for an economic drop of 8 to 9% where the growth of the pension point is included with 40%’ Daianu said.
The chairman of the Fiscal Council stated that, in case the growth of the pension point is lower, of 10% for example, there will be a nonsignificant reduction of the budgetary deficit this yea, at 7.3 – 8.2%.
According to Daniel Daianu, the financing is an underestimated issue by many in the public debate of Romania, including by certain economists.
The Fiscal Council, the Romanian Society of Economy (SOREC) and the Institute for the Study of Extreme Events (ISEE/SNSPA) organized on Thursday an online debate with the issue of the pandemics impact COVID-19 on the Romanian economy. Two aspects were in the attention of the participants, the evolution of the economy this year and ways of calming down the crisis; the perspective on the year to come.