This year Romania cannot fit within the deficit target of 3 percent and the budget for 2020 should start the correction, the key-parameters being maintaining the deficit level of 2019, Chairman of the Fiscal Council Daniel Daianu stated at the European Union Finance & Banking Lectures Project 2019 (EU-COFILE) seminar.
He mentioned that it's possible for many not to understand the magnitude of these commitments.
"With great nonchalance, talks are being carried out on maintaining the calendar... I have the feeling that there is no sense of proportions. We can talk about a sense of measure. People who have the sense of measure. Automatically, you think that a person who has the sense of measure also has a sense of proportions. Why do I say that their magnitude is not understood? Because under unchanged conditions, if the implementation calendar is maintained, the percentage supplement of the GDP in 2022 would be between 3 and 4 percent of the GDP. Folks, we are talking about 3 and 4 percent of the GDP and not about 0.3 or 0.4 percent. This is why I say that there is no sense of proportions," Daianu stated.
In his view, the 2020 budget should start the correction and the key-parameter should be for the next year budget deficit to exceed the one in 2019, taking into account that it's possible for it not to be below 3 percent.
Daniel Daianu said that the institution has a new assessment of the deficit for 2019, but said he doesn't want to say what is the figure. He stated that the increase in 2010 of the pension point has a 3 times higher impact in 2021. The deficit in 2021 would exceed 4 percent of the GDP, in 2021 it would be over 5.7 percent of the GDP and in 2022 it would be around 7 percent. Daianu explained that the figures only take the into account the increases with social assistance (including pensions) and not the increases with wages.
The European Union Finance & Banking Lectures Project Seminar is organised by the National Bank of Romania (BNR), the Romanian Association of Banks and the Alpha Bank at the BNR Training Centre in Sinaia.