Public sector wage increase in Romania to widen budget deficit to over 4%

The budget deficit would reach 2.2% of the GDP next year, taking into account the impact of the new Fiscal Code’s measures, but without an increase in public sector wages, said Fiscal Council president Ionut Dumitru. However, if the Government does raise the wages in public sector, the budget deficit would amount to over 4% of the GDP. The budgetary impact of raising public sector salaries exceeds 2% of the GDP. The Government should consider whether the salary increases are sustainable, considering that state’s wage costs decreased from 10% before the crisis to about 7% of the GDP, Dumitru said, cited by local Mediafax. If the salaries go up again, the salary expenses would reach over 9% of the GDP. “We would practically reverse most of the adjustments made in recent years,” said Dumitru. editor@romania-insider.com