Romanian lawmakers endorse optimistic budget planning

The joint meeting of the Romanian parliament’s chambers wrapped up on December 20 the debates on the budget planning for 2024 drafted by the government and endorsed it despite the major concerns expressed by the Fiscal Council.

The budget planning is particularly optimistic on the revenues side, the Fiscal Council warned – estimating a 1.1%-of-GDP overestimate of the revenues.

On its side, the ruling coalition argued that the revenues would be boosted by a combination of fighting tax evasion and more efficient tax collection.

However, in the very likely case the revenues will lag behind projections (as was the case in 2023), chances are the executive will have to either endorse more fiscal corrective packages (a delicate task in a year with multiple elections) or simply seek more financing to address the wider gap – which would put pressure on the public financing to the point that the rating agencies may cut the outlook on their sovereign ratings assigned to Romania from stable (currently) to negative.

(Photo source: Inquam Photos / George Călin)