Romania maintains 8.6%-of-GDP public deficit target

Romania's budget revenues increased in August, September, and October compared to the same months last year; therefore, the Government will maintain the deficit target set in August (8.6% of GDP), finance minister Florin Citu said on Monday, November 2.

Furthermore, the Treasury is draining money from the local market at a lower cost than last year, minister Citu added.

However, this is not surprising or outstanding performance, after the policy rate cuts operated by Romania's National Bank (BNR), which furthermore accepted to buy government debt on the secondary market.

Citu also claimed that the economy would rebound in the third quarter of the year - again, nothing outstanding given the low base (as long as minister Citu does not imply year-on-year growth in Q3 - which he probably does not).

The budget revision, announced last week, will be ready in the second week of November, he added.

"The objectives are maintaining the deficit in line with the target announced in August and then pursuing fiscal consolidation in the coming years. The dynamic of the budget revenues gives us confidence that we can do this during the coming period," said minister Citu.

Romania's public deficit rose 2.5 times y/y to RON 67.3 billion (EUR 13.9 billion) or 6.36% of GDP in the first three quarters of this year. The Government's fiscal stimuli were partly responsible for the higher deficit. Some of these measures are only temporary and expected to support budget revenues during the recovery stage of the economic cycle.

(Photo: Octav Ganea/ Inquam Photos)