The latest version of the 2019 budget provides higher spending by more than RON 2 billion, as following the introduction of child allowances the deficit increases, according to the Ministry of Finance, to 2.76% of GDP. However, the Fiscal Council is of the opinion that the deficit will exceed 3% of GDP this year, given the projected revenues and expenditures, if public policies do not change.
“The increase of the budget deficit target for 2019 and the apparent underestimation of social assistance and contribution payments to the EU budget imply a deficit in the immediate vicinity of the 3% of GDP reference level, even if ignoring the problems related to the overspending of budgetary revenues, identified in the context of the opinion of the Fiscal Council of February 5, 2019 (RON 4.5 billion, as the bank asset tax would be maintained in the current form). Taking into account this overestimation, we estimate that the budget deficit at the end of the year will reach about 3.5% of GDP, if maintaining unchanged policies,” the document reads.
A first remark refers to the significant differences that occur in the consolidated budget for 2019 between the form sent to the Fiscal Council January 31, 2019 and the one subsequently approved by the Government and sent to the Parliament.
Given the budget execution, the Fiscal Council assesses the likely lack of budget revenues to around RON 3.5 billion.