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Ionut Dumitru: 5% economic growth prospect ambitious, while incomes seem too optimistic

Ionut Dumitru, the chairman of the Fiscal Council, declared on Tuesday that the 5% economic growth prospect, on which 2017 budget is based, is very ambitious and budget incomes seem to be too optimistic.

“If we consider the latest variant sent by the Finance Ministry to the Fiscal Council, it is a budget which bases its income projections on a very ambitious economic growth projection of over 5%. Now I don’t think there is an analyst which should have a bigger projection than 5% economic increase. Practically, budget incomes seem to be too optimistic from the perspective of a prudent budget policy,” Ionut Dumitru said.

He showed it is not prudent to choose such an optimistic projection, because too big incomes would be created, leading to deficit increase.

“When we are talking about prognosis, nobody is right,, but when you have prognosis which is out of the interval projected by other analysts or other institutions, maybe it is not wise to have such an optimistic projection because you may create incomes larger than what will be executed and if you don’t take collective measures you may have a large deficit,” the chairman of the Fiscal Council showed.

He pointed out that the probability of having economic growth of over 5% projected by the government is a small one now, compared to most institutions which make projections while having a 4% projection.

Dumitru mentioned that Romania must have a deficit lower than 3% of GDP and 2017 budget rectifications might be negative.

“A 3% deficit is too large for Romania now. We should have lower deficits from the prospects of a prudent fiscal-budget policy. We don’t know now if there will be positive or negative budget rectifications. Due to premises from which we start now, with a too optimistic projection from budget incomes, there are bigger chances to see negative rather than positive rectifications”, Dumitru concluded.