November 22, 2017

Fiscal Council: Budget rectification unrealistic

The Fiscal Council warns in an opinion issued on July 30 and released yesterday, when the government decided the first budgetary rectification of the year that the budget rectification infringes several fiscal budgetary rules, the most important being the deficit target, and it was devised starting from unrealistic projections, just one example being the sums from income tax and insurance contributions, which were overestimated by RON 1 bln. “The infringing of the fiscal-budgetary rules by the draft budget rectification gravely undermines their credibility, especially with regard to the failure to respect the budget deficit target,” explains Ionut Dumitru, president of the Fiscal Council. The Council mentions that it was informed by the Ministry of Finance about the rectification the previous evening, so it did not have time to make a thorough analysis until the project is approved by the Executive. The Council warns that the estimations regarding the tax on incomes and salaries were not revised downwards at the budget rectification, while the 7 % wage increase rate taken into account when drafting the initial budget appears as “very optimistic” at this moment and the increase of the number of employees, as well as the “discretionary” measures that were taken do not seem enough to compensate the unfavorable dynamic of the salary gain.
Source: Nine o’clock (read more)

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