EC, concerned Romania might register the largest increase of budget deficit in the EU

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The European Commission is concerned that Romania could register this year the largest increase of budget deficit in the European Union, although the government has said there is no reason for alarm in this regard, Angela Cristea, head of the EC Representation in Romania, has said on Wednesday, on the occasion of launching the Economic Report on Romania 2017.

“Last year Romania registered the highest economic growth in Europe, of 4.9%. At the same time, the report draws the attention on the risks that this year it might face the highest increase in public deficit. We were assured by the government there is no reason for concern, however we are like a parent always worried the child might get sick. We’d better be worried and nothing bad happens, so that in the next report we can say we had nothing to worry about,” Cristea said.

She added that Romania is facing growing social inequality, a trend started in 2012.

“We are witnessing decrease in poverty, but also the growth of social inequality. It is a trend started in 2012. It is not specific to Romania, other EU states register the same trend,” Cristea also said.

According to the EC winter forecast issued in February, Romania’s budget deficit would reach 3.6% of GDP in 2017, against 3.2% as estimated last autumn, and will increase to 3.9% of GDP in 2018.

The autumn report warned at the time that the budget for 2017 includes lots of tax cuts and increases in expenditures for pensions and wages in the public sector. On the other hand, the EC has revised upwards the forecast on economic growth to 4.4% in 2017 and to 3.7% in 2018.

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