Romania's Government adopts 2016 budget, sends it to the Parliament

Romania’s Government adopted on December 9 the budget for 2016 and sent it to the Parliament for approval. The budget estimates an economic growth of 4.1% and a GDP of RON 747 billion (EUR 166.4 billion). Revenues amount to EUR 51.4 billion, or 31% of the GDP, whereas expenses reach EUR 56.1 billion, or 33.8% of the GDP. The Finance Ministry estimates the cash budget deficit at 2.8% of the GDP, which corresponds to a structural deficit of 2.73% of the GDP. Romania’s Fiscal Council has criticized the budget, saying that it brought both tax cuts and spending increases, and that it was unrealistic, reports local Ziarul Financiar. The overvaluation of VAT revenues could lead to a negative revenue gap of 0.3% of the GDP in 2016. It means that the budget could exceed the maximum allowed deficit of 3% of GDP in 2016 and more so in 2017, according to the Fiscal Council. editor@romania-insider.com (photo source: gov.ro)