Romania’s prime minister Florin Citu said that the budget revision would be based on the budget execution at the ministry level for the first half of the year, with the default revision to reflect the deviation from the target, News.ro reported.

Notably, the H1 budget execution should have been published already by this date, under normal circumstances.

Ministries that failed to spend the money allocated in H1 will have the full-year target revised downward accordingly.

At least, this will be the starting point for negotiations, and ministers will have to justify the deviation for not having the full-year budget cut.

PM Citu, who is serving as acting minister of finance as well, asked individual ministers to come up with the H1 budget execution report.

The analysis will be made public, Citu also said. Romania’s Government drafted the 2021 budget planning based on a 4.3% GDP growth and estimates of 4.4% GDP contraction last year. However, it turned out that last year’s contraction was milder (-3.8%), and this year’s growth will be much stronger: some 7%.

PM Citu expressed recently hopes for ‘double digit’ economic growth, which would result in stronger budget revenues consequently.

It remains unclear how the windfall revenues will be spent: for spending or for accelerating the fiscal consolidation - a more sensible option since the slow consolidation policy was justified precisely by the slow post-Covid recovery (which does not seem to be the case to the same extent now).

(Photo: Gov.ro)

andrei@romania-insider.com