In its final opinion on the second budget revision, the Romanian Fiscal Council agrees that the targets set by the Government on November 24 - primarily the 7.13%-of-GDP deficit - are feasible.

The concerns related to the second budget revision, expressed by the Fiscal Council since the preliminary opinion, were, however, related to why the Government hasn’t used the windfall revenues to take a headstart in fiscal consolidation and preferred maintaining a deficit target above 7% of GDP.

The Q3 GDP data, weaker than anticipated, toned down such concerns while keeping the full-year deficit target on the safe side.

The CFA Analysts, according to their latest October poll, expect a budget deficit of only 6.8% of GDP this year. However, the budget planning for 2022 will be “a tough test” for the Government.

“The construction of a budget for 2022 will be a very tough test given the need to accommodate the difficult situations faced by Romania (health crisis, energy price shock, effects of tensions on international markets) and the budget consolidation trajectory.

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andrei@romania-insider.com