IMF: Romania’s budget deficit may go up to 3.7% this year

The International Monetary Fund (IMF) estimates that Romania’s budget deficit may reach 3.7% this year and 3.9% in 2018 if the Government doesn’t take other measures besides the ones included in the budget project, said on Friday Reza Baqir, the head of the IMF mission in Romania. He explained that a deficit of 2.3% of the GDP for this year and 2% for 2018 would contribute to keeping the public debt on a downward path. In early March, the Ministry of Finance assured that Romania will respect the deficit target of below 3% of GDP after the European Commission also asked the Romanian Government to come up with a plan to reduce the deficit this year. The EC also estimates that Romania will go over the 3% of GDP deficit limit. Reza Baqir explained that the successive reductions of taxes, the wage increases, and the few public investments have begun threatening the achievements of recent years and restrict the potential growth of the economy. The IMF official added that it’s important for Romania to focus on policies that boost investments instead of stimulating consumption. EC worried about possible spike in Romania’s budget deficit editor@romania-insider.com