RO Fiscal Council sees 2022 public deficit well above Govt.’s target

The budget planning for 2022 drafted by the Government is consistent with a public deficit (cash) of 7% of GDP, as opposed to 5.84% projected by the Executive, according to the opinion released by the Fiscal Council about the 2022 budget sketched and already endorsed by the Government.

Since this year’s cash deficit is expected at 7.13% of GDP, the Fiscal Council’s estimate indicates only minor fiscal consolidation.

“This [deficit estimate] raises big questions about budget consolidation, according to the initial budget construction. Although the draft budget targets a cash deficit of 5.84% of GDP, the CF considers that there are not enough credible budgetary adjustment measures to achieve this target.

CF considers that it is not wise to include ex-ante as part of the projected revenues, some additional amounts based on the planned increase of tax collection efficiency and on planned reduction of tax evasion. To this adds the excise tax revenues gap and the need for additional allocations at the level of interest and social assistance expenses identified by the CF,” the Fiscal Council argues in its opinion on the State Budget Law for 2022.

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