Romanian president signs 2018 budget law despite vulnerabilities

Romania’s president Klaus Iohannis signed on Wednesday the budget law for 2018 but pointed out the vulnerabilities and challenges of the current fiscal-budgetary framework. He is worried that the Government won’t be able to keep the budget deficit under 3% of the GDP this year. Romania’s budget for 2018 was approved by the Government and then voted by the Parliament at the end of last year. It takes into account an economic growth rate of 5.5% this year and a 12% increase in revenues and expenses while the budget deficit should remain just under 3% of the GDP. “It’s essential for Romania that fiscal-budgetary policies re-enter a responsibility and caution path and that decision makers don’t repeat the mistakes or temptations of exuberant policies like those before the economic crisis, so that Romanians’ wellness is not affected on the medium and long term,” the president warned. He added that Romania should avoid falling into the trap of unsustainable economic growth, driven by consumption, budgetary deficits and high public debt. He also said that the budget for 2018 ignores the European Commission’s advice that Romania gradually reduces its budget deficit towards 0.5% of its GDP. editor@romania-insider.com