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September 29, 2022

FinMin contradicts EC experts’ predictions

Despite all speculations and “analyses” that both EC and Romanian Fiscal Council experts have publicly launched, Finance Minister Eugen Teodorovici announced yesterday that Romania’s deficit will not surpass 3 per cent of GDP in 2016. In fact, Teodorovici claims, Romania will not enter the warning margin of the deficit negotiated with the IMF/EC/WB.

“If we identify all compensatory measures that should counterbalance the impact that the Fiscal Code will have on the budget next year then… We have 1.2 per cent plus 0.5 per cent temporary deviation, so 1.7 – 1.8 per cent, in that ballpark. This would roughly be what is feasible,” Teodorovici said.

He pointed out that there are already a series of compensatory measures that bring the deficit to below 3 per cent, “but it will be much lower, even while respecting what we have already committed to.”

“This Fiscal Code is awaited by everyone. Look at the effect of the 9 per cent measure on June 1. After the first weeks the sales have already grown by at least 17 per cent. I believe the economic impact of this measure will be extremely important. I trust that all the compensatory measures we identify – a part have been identified – will mean in 2016 the deficit will be the one assumed with our international partners (1.2 per cent of GDP – editor’s note),” the Finance Minister explained.

The Finance Minister believes that the Romanian administration has a great number of unjustified expenditures.

“There are expenditures which, if rationally planned, namely if spent more efficiently and even cut in certain areas, without affecting the investment side, will be one of the ways that will lead to this deficit being very low. (…) There are many areas of the economy in which we can resort to cuts without affecting the investment side. The main goal by the end of the year, at the July rectification, is for the investment side to receive the biggest financial allocation,” Teodorovici added.


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