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FinMin Citu: Romania's 2020 budget deficit at 6.7 percent of GDP, economy to shrink 2.2 pct
Romania's budget deficit this year will stand at 6.7 percent of GDP, and the economy will shrink 2.2 percent of GDP by the end of 2020, Public Finance Minister Florin Citu told broadcaster Digi 24 on Monday evening.
"The global economy is going through an unprecedented crisis that required us to keep people healthy in the first place, but also not kill the economy. It was a big challenge for this government. We are looking in our own yard, but times are difficult for all the economies. In the US they estimate a budget deficit of almost 24 percent of GDP this year, for you to understand the scale of the crisis. In Europe, the euro area is expected to run a budget deficit of roughly 13 percent, and Romania's [deficit] is projected at 6.7 percent of GDP. Things are looking good at this moment, through the measures we took, we managed to have economic growth in the first quarter, 2.4 percent of GDP, the highest economic growth in the EU after Ireland. As regards the mid-year GDP, we have to deal with the second quarter that is seriously affected, and the economy is expected to shrink 2.2 percent overall this year. Romania' won't experience a technical recession, under no circumstance will we have two negative quarters in a row. Economy will make a comeback from the third quarter, as I said from the start," Citu declared.
The FinMin also mentioned that compared to 2019, the inflation rate has halved this year to almost 2 percent.
"Under the Liberal rule the inflation rate has fallen every month. Last year, with all the economic growth and in absence of any crisis, the inflation rate was around 4 percent, whereas this year we are close to 2 percent and prices keep falling. None of the allegations tossed by the Social Democrats has happened. This was somehow a PSD strategy to scare, to panic the people," he underscored.
Florin Citu added that 2.2 billion lei have been disbursed between April and June for furlough benefits, and the facilities granted until June 30 2020 have injected 15 billion lei into companies.
Prime Minister Ludovic Orban announced on Monday that the government's economic program will be presented on July 1, with President Klaus Iohannis also attending.
"The presentation of the economic program is slated for Wednesday, with the President of Romania - with whom we collaborated closely - also attending. After the presentation of the economic program, we are set to adopt within one month at the most all the necessary regulatory acts for implementing the measures set forth in the program," Orban said at the end of the assembly meeting of the Coalition for Romania's Development.