Romania’s FinMin revises public deficit for this year to 9.1% of GDP

Romania's Finance Ministry operated the third budget revision this year, envisaging a public deficit of RON 96 billion (EUR 19.8 bln), or 9.1% of the year's GDP, up from 8.6% of GDP in the previous revision adopted in August.

The budget planning assumes 4.2% GDP contraction, compared to 3.8% expected in August, finance minister Florin Citu announced in a press conference, quoted by News.ro.

This third revision is visibly more optimistic than the European Commission's Autumn Forecast, which includes expectations for a 10.3% of GDP public deficit and 5.2% GDP contraction.

However, the EC's forecast was drafted under the worst-case scenario, including all the social benefits (including a 40% pension hike) passed by the Parliament.

For next year, the Government targets a 7% of GDP deficit, minister Citu said.

Speaking of this year's budget, he expressed satisfaction with the revenues in the first ten months of the year, which were higher than in the same period last year.

He estimated that the full-year revenues would hit RON 337 bln (close to EUR 70 bln) or 32.2% of GDP, including the transfers from the European Union's budget.

The third budget revision means a public deficit some RON 5 bln (EUR 1 bln) wider than envisaged in August.

The Ministry of Development (RON 1 bln), Agriculture Ministry Agriculture (RON 1.1 bln), and Health Ministry (RON 1.1 bln) will get extra funds.

Another RON 1.2 bln will go to the public healthcare insurance house (CNAS) to finance the additional costs for treating COVID-19 patients.

Finally, the Government's reserves, generally used for discretionary spending, were supplemented by RON 1.1 bln.

Meanwhile, the Economy Ministry and Finance Ministry lost some of the funds initially allotted to them.

(Photo: Gov.ro)