Fiscal Council: The starting point of the budget deficit for 2021 would be of at least 7.5% of GDP

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The starting point of the budget deficit for 2021 would be at least 7.5% of GDP, even in the conditions of a recovery of the economy, estimated by the National Commission for Strategy and Forecast at 4.9% for next year, according to the representatives of the Fiscal Council.

In their opinion, this situation calls for increased caution in adopting any fiscal-budgetary policy measures and the early identification of a gradual and coherent budgetary consolidation strategy, which minimizes the associated economic and social costs, according to Agerpres.

“Given the baseline scenario of the CF characterized by a decrease in real GDP of between 4 and 6%, the budget deficit estimate for 2020 is between 8.6-9.4% of GDP. In this economic, health and electoral context, characterized by unusually high uncertainties, more unfavorable developments than those currently anticipated cannot be ruled out. The starting point of the 2021 budget deficit would be at least 7.5% of GDP, even admitting the expiration of temporary measures and the return of forecasted by CNSP – economic growth of 4.9% for 2021. These perspectives of the public budget require increased caution in adopting any fiscal-budgetary policy measures and early identification of a gradual and coherent budget consolidation strategy, which minimize the associated economic and social costs,” according to the opinion of the Fiscal Council on the second rectification of the general consolidated budget for 2020.

In the conditions of the new budgetary parameters, the size of the necessary public financing of Romania in 2020 is of about 13% of GDP, notes the Council.

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