Romania’s Government has realised that it needs to operate a significant budget revision as soon as possible if it wishes to keep the 4.4%-of-GDP public deficit target in place for the whole year.

But it has not yet identified measures of the magnitude needed to address the unexpected but sizeable deviation from the 2023 budget planning, estimated at 1%-of-GDP based on the current developments. The gap was prompted by both disappointing revenues and larger-than-expected expenditures.

Firstly, the Government ran out of funds to finance the energy “price and subsidy” scheme and urgently needs EUR 90 mln (plus EUR 200 mln afterwards) for this scheme only.

Secondly, the tax revenues rose disappointingly by only 7% YoY in the first quarter of the year, according to News.ro. The revenues thus fell 3.4% (nearly RON 3 bln) below the target.

The Executive estimates an unexpected RON 20 bln gap, which accounts for over 1% of the year’s GDP or some 3% of the year’s planned budget expenditure, finance minister Adrian Caciu admitted, quoted by Wall-street.ro. He urged the state authorities to put pressure on taxpayers, reminding that “a certain company” [OMV Petrom] imposed supplementary tax dues above its own calculations, in the amount of EUR 100 mln upon an inspection. 

iulian@romania-insider.com

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