Romania's Fiscal Council expects 6%-of-GDP public deficit this year under no-changes scenario

Romania's Fiscal Council has revised its budget deficit projection for the current year upwards, estimating that it will probably be above 6% of GDP (from 5.7% of GDP previously) in the absence of measures to correct the budgetary slippage, according to the institution's Annual Report quoted by Economica.net.

The 2.3% of GDP budget deficit for the first six months of 2023, about 0.63pp higher than the same period of the previous year, was caused by the slower revenues in some areas (compared to the actual economic developments and, separately, compared to the target), as well as the increase beyond expectations of some categories of expenses in relation to the targets in the draft budget.

The execution in the second part of the year will be affected by the salary increases granted after adopting the annual budget laws, while the measures adopted by emergency ordinance OUG 34/2023 appear insufficient to ensure the continuity of the fiscal-budgetary consolidation process.

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