Romania’s finance ministry increases budget deficit to 4.3%, lowers economic growth forecasts

Sursa: Pexels

Romania’s finance ministry says the budget deficit for the year will rise to 4.3% of the gross domestic product, significantly higher than the 3% recommended by the European Union.

The previous Social Democrat-led government had forecast a deficit of 2.76% but the Liberals who came to office earlier this month claimed the outgoing government had kept two sets of book, concealing the true level of public spending.

The ministry also said Tuesday that it was lowering economic growth projection for the year to 4%, lower than the 5.5% previously forecast.

The ministry said the revised figures were due to poor tax collection and high public expenditure.

IN figures, the 2019 budget deficit is estimated to be 44.72 billion  lei or 9.3 billion euros, compared to the previous forecast of 28.45 billion lei.

For the first ten months of 2019, the budget deficit was 2.8% of national output, or GDP, the ministry said.

Liberal Finance Minister Florin Citu warned earlier this month that the budget gap could widen to 4% of gross domestic product this year and accused his Social Democrat predecessor Eugen Teodorovici of faking numbers.

Last week, the European Commission said that Romania needs to prevent a possible widening of its budget deficit beyond the 3% threshold agreed with the EU.

The Liberals took office after the Social Democrat government led by Viorica Dancila was overturned in a no-confidence vote on Oct. 10.

The government say will it will adjust spending, cutting funds to the education, interior, transport, agriculture, rural development and communications’ ministry.

Other ministries will see extra funds including the health, finance, environment and labor ministries.


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