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Bucharest
November 18, 2019
BUSINESS

Salary increase in the public sector, followed by three years of restrictive policies

The salary increase operated in the public sector will be followed by three years of restrictive government policies, with possible subsequent wage hikes being strictly dependent from the evolution of the Romanian economy, mainly by productivity, reads a governmental document quoted by Mediafax. As a share of the Gross Domestic Product (GDP), salary expenses will be limited to 7.1 pc in 2013, 7 pc in 2014 and 6.8 pc in 2015. However, even with a prudent fiscal-budget policy in place and a lower budget deficit, the government also takes into consideration the internal risks generated by possible “skidding” of fiscal policies and reforms, in the context of “uncertainties associated with the electoral calendar,” as these risks relate to economic slowdown and pressures on the target of incomes to the budget.The government recently decided to increase salaries in the public sector by 8 pc as of June 1, and by another 7.4 pc on December 1, but the second increase will be made only is the situation of the state budget will allow it. The decision represents a return of salaries to the levels registered before the 25 pc cut of July 2010, and follows a first hike of 15 pc operated in 2011. Following the two-step wage hike of this year, the weight of expenses with salaries in the GDP will increase from 6.9 pc to 7.2 pc.

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