Romania’s Fiscal Council projects 7%-of-GDP public deficit in 2022

Romania will not be able to close the state budget with a deficit under 3% of the GDP this year and maintaining the pension growth calendar “under unchanged conditions” will lead to a deficit of 4% of GDP next year, 5.7% in 2021 and 7% in 2022, said Daniel Daianu, the president of the Fiscal Council, an independent body that analyzes the state’s fiscal policies.

Such an evolution would determine the European Commission to trigger the excessive deficit procedure for Romania while rating agencies would downgrade the country’s sovereign rating, according to Daianu, local Profit.ro reported. He added that “this is a moderately optimistic scenario." “God forbid we have real recession.”

Although the Fiscal Council president believes that Romania is not yet on the verge of collapse, he suggested correction on the expenditures side because expecting revenues to increase by 3% of GDP would be unrealistic. With no corrections, Romania will end (in 2022) by spending it entire budget for pensions and wages in the public sector, Daianu warned.

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