Romania’s former PM Citu says it drafted 2022 budget with 5.84%-of-GDP deficit

Former prime minister Florin Citu said that his Liberal Government was going to bring the public deficit somewhere in between 5% of GDP and 7% of GDP this year and claimed that he left a budget planning for next year with a target of 5.84%-of-GDP deficit, News.ro reported.

He thus puts pressure on the new Government at a time when the rating agencies, central bank and all analysts expect to see the new Government’s fiscal strategy before shaping their expectations.

The new Government, headed by Liberal prime minister Nicolae Ciuca but controlled by the Social Democrats (including through finance minister Adrian Caciu), maintained under a final budget revision of this year’s deficit target at 7.13% of GDP and released no plan for 2022 yet.

The public deficit was 4% of GDP at the end of October and probably 5% of GDP at the end of November, former PM Citu stated, arguing (in line with the Fiscal Council) that there is no reason for a 7%-of-GDP deficit this year.

In related news, Cristian Popa - a member of the National Bank of Romania (BNR) Board, stated that the new Government “sticking with” the 7.13%-of-GDP deficit target “eliminates a source of uncertainty,” thus implying rather cautious expectations from the new Government, Bursa.ro reported. Social Democrats’ rhetoric justifies such caution.

“It is very important to see how the budget planning for next year looks like; it is important to see that the new government remains committed to fiscal consolidation,” Cristian Popa stated.

(Photo source: Gov.ro)