Romania’s budget deficit is increasing as takes were lowered and public spending went up, a European Commission representative warned on Wednesday, June 20, Mediafax reported.

Isabele Grilo, the head of the EC’s General Direction for Economic and Financial Affairs came to Bucharest to present a report which shows that Romania hasn’t respected its commitments on public finances.

Romania’s budgets for 2017 and 2018 provided deficits of up to 3% of the gross domestic product (GDP), over the 1% threshold included in the medium-term objectives. Moreover, the two budget amendments in 2017 broke EU rules as they increased the overall deficit during the financial exercise. They also included personnel spending increases, which is also against EU rules.

The EC foresees that Romania’s public debt will increase significantly if the current fiscal and budgetary policies are maintained. Thus, the debt could reach 60% of the GDP by 2028, putting the next generations in a difficult situation.

Romania’s public debt currently stands at some 37.8% of the GDP, but it is expected to reach 42.7% of the GDP in 2023, according to IMF data.

editor@romania-insider.com