Romania’s GDP will contract by 1.9% this year, and the Government will target a public deficit of 6.7% of GDP, finance minister Forin Citu announced in a press conference, according to Romania-Insider.com.
The Government’s estimation is much more optimistic than that of the International Monetary Fund (IMF), which expects Romania’s economy to plunge by 5% this year. The Government thus expects a nominal GDP of RON 1,080 billion (EUR 223 bln, assuming an exchange rate of RON 4.85 to EUR) compared to RON 1,120 bln initially projected.
The 3% of GDP rise in the budget deficit generates supplementary financing needs amounting to some EUR 6 billion. Nominally, the public deficit target was moved from RON 40.5 billion under the initial budget planning (consistent with 3.6%-of-GDP public deficit) to RON 72.5 bln (EUR 15 bln). The revenues to the state budget will decrease by RON 23.2 bln (EUR 4.78 bln) compared to the initial budget for 2020.
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