The Romanian Ministry of Finance estimates a budget deficit of approximately 4.1% of GDP for the first ten months of the year and envisages keeping the full-year deficit below 6.5% of GDP (versus 7.13%-of-GDP target).

The preliminary estimate for the first ten months is based on data available at the end of October, to be revised and published after November 25.

The intention to keep the deficit below 6.5% of GDP is surprising, and it contrasts the Fiscal Council's opinion on the latest budget revision. The Council estimates a 0.5%-of-GDP upward deviation of the public deficit, compared to the Government's optimistic target, based on expected failure to collect funds from the 5G auctions and higher estimated social security expenses.

According to sources familiar with the operations, quoted by Profit.ro, the payments to budget operated by companies were significantly higher than expected in October, supporting the Government's hope for a positive trend of revenues. Furthermore, another budget revision would cut the funds allocated to some institutions but not spent.

On the downside, the Government must allocate subsidies to municipal heating systems and subsidies for residential electricity and natural gas consumers.

andrei@romania-insider.com

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