Fiscal Council: The budget deficit could increase to 4.8% of GDP by 2020

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The Fiscal Council (CF) estimates a probable level of the budget deficit for 2020 between 4.6 – 4.8% of GDP, over 6% of GDP in 2021 and over 7% of GDP in 2022, according to CF Opinion on The law of the state budget and the Law of the social insurance budget for 2020.

“Considering the information available at the moment, the CF estimates a probable level of the budget deficit for 2020 between 4.6 – 4.8% of GDP. The deviation from the target of 3.6% of the draft budget comes from: 0.45 percentage points (pp) of GDP from the deterioration over probable expectations of the budget execution for 2019, which represents the starting point in the subsequent budget constructions; 0.5 pp from the modification of taxes after the adoption of the draft budget for 2020; 0.15 pp in the hypothesis of a more plausible (prudent) macroeconomic projection,” is shown in the document quoted by Agerpres.

The Fiscal Council considers that additional measures on budgetary revenues and expenditures are needed to ensure convergence with the proposed deficit target for the current year.

Also, the institution emphasizes that the considerable exceeding of the 3% threshold for the budget deficit, estimated to have occurred in 2019, persists in 2020, as well as in the medium term under the given conditions.

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