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The Fiscal Council warns that there are significant risks of exceeding the deficit target of 3% of GDP
The Fiscal Council has criticised the Government’s budget rectification draft, warning there are significant risks for a higher deficit target than the one assumed of 3 pc of the GDP.
“In the absence of some credible compensatory measures, the budget deficit will probably range from 3,4% to 3.7% of GDP at the end of 2019,” the Fiscal Council says.
The Council also opines that the economy will not see an increase higher than 4% at the end of the year, as against the Government’s forecast of 5.5%, and that more problems will come in the coming years when the impact of the Pension Law will put an extra pressure on the budget.
The Fiscal Council warns that expenses on social assistance and acquisitions re also threatened by an under-financing up to RON 4.5 billion.
“Romania is substantially deviating from the EU fiscal rules (…) The Fiscal Council’s doubts on the level envisaged for the budget revenues are high – particularly the one from VAT and social securities contributions, identifying less cumulative incomes of around RON 5.8-6.8 billion. Moreover, if the projects within the National Local Development Program (PNDL) are not included on the list of eligible EU funds projects, there could be a gap of RON 7.7-8.7 billion in revenues“, the council points out.