Romanian prime minister Florin Citu announced "good news" for the economy, including better than expected budget revenues supporting a more ambitious target of under 7% of GDP for the public deficit this year.

"This is my new target, a public deficit of under 7% of GDP," PM Citu stated in a press conference held in Cluj-Napoca on April 16, quoted by Economica.net.

He further stressed that his Government achieved this despite not hiking taxes or introducing new taxes. Such a performance would be very much appreciated by the institutional investors and international financial institutions and will strengthen their trust in the Romanian Government, PM Citu argued.

Under the budget planning, the Government envisaged a 7.16%-of-GDP budget deficit this year as a (modest) step toward more substantial fiscal consolidation in the next years.

Besides the "better than expected revenues," PM Citu also mentioned a stronger real GDP growth: the Government assumed 4.3% growth while the International Monetary Fund is much more optimistic with a 6% forecast.

Furthermore, inflation might drive up the nominal GDP - further diluting the public deficit expressed as a fraction of GDP. 

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iulian@romania-insider.com