Romania's Govt. promises fiscal consolidation in 2020 without rephasing pension hikes

Romania’s budget deficit will narrow to 3.5% of GDP in 2020, from 4.3% of GDP this year, “while keeping all the laws in place,'' finance minister Florin Citu announced on Tuesday, November 27 in a press conference.

A draft budget planning for next year will be published in the coming days, he stated, according to local Hotnews.ro.

All the independent projections point to a significant increase of the budget deficit next year if the 40% pension hike planned for September and other bills with a similar impact on the budget expenditures are maintained. The European Commission in its Autumn Forecast projected 4.4%-of-GDP deficit next year from 3.6% of GDP in 2019.

The 4.3%-of-GDP deficit announced by Citu for 2019 is not caused by uploading part of the expenses, but covering expenses “hidden” or “delayed” by the past Government.

Other data on which the 2020 budget is based have already been published by the National Strategy and Forecast Commission (CNSP). The Romanian Government is more optimistic than the European Commission in regard to the growth rate as well: while the EC envisages 3.6% GDP growth for 2020 and 3.3% in 2021, CNSP drafted a better forecast for the Government use: 4.1% GDP growth in 2020 and 4.2% on average in 2021-2023.

(Photo source: Inquam Photos/Octav Ganea)