Romanian PM's advisor confirms 5%-of-GDP deficit target for 2024, no tax hike next year
<p>Florin Spătaru, an adviser in the chancellery of Romanian prime minister Marcel Ciolacu and former minister of economy, speaking for <a href="https://www.b1tv.ro/politica/spataru-da-asigurari-ca-statul-nu-va-creste-taxele-in-2025-ca-sa-faca-rost-de-bani-pentru-pensiile-marite-despre-ingrijorarile-comisiei-europene-ma-surprind-video-1475695.html?mc_cid=644bacde93&amp;mc_eid=cd1f92f96c" rel="noopener" target="_blank">B1 TV,</a> rejected the European Commission's fiscal slippage concerns and assured that the public deficit would remain close to the 5%-of-GDP target this year. He also assured the government will not hike the tax rates next year to finance the pension reform.</p>

<p>Spătaru said the public budget posted a surplus in one of the months this year, but he hasn't mentioned which one. It could be only May since the data for the January-April period were officially released, and none of the four months ended with a surplus.</p>

<p>Romania's general government budget reached 3.43% in January-May, edging up against the government's expectations from 3.24% in January-April, according to preliminary (hence not official) data published by Profit.ro.</p>

<p>Under the Spring Forecast, the Commission said Romania's public deficit would hit 6.9% of GDP to decline to 6/6% of GDP in 2025. More recently, the Commission recommended that the European Council urge Romania to take fiscal consolidation steps as soon as this year – and not wait until 2025.</p>

<p>The Romanian official confidently rejected the European Commission's gloomy fiscal projection.</p>

<p>"The European Commission should better pay more attention to the latest statistical data published by Romania. After many years, we managed to have a budget surplus, not a deficit, in one month of 2024. So this deficit that we registered in the first part, which was caused by certain one-off payments, [...] is now decreasing since we have a surplus in one month," Florin Spătaru stated, implying that the public deficit in January-May (to be soon published officially) decreased below 3.24% of GDP.</p>

<p>Spătaru also argued that the new Pension Law, which envisages an average increase of pensions by 40%, was a target included in the National Resilience Facility (PNRR), therefore is quite surprising to see the Commission's experts expressing concerns about its impact.</p>

<p>Asked if the increase in pensions puts pressure on the budget, Spătaru denied. He said that the increased expenditures of the public pension system were envisaged when drafting the medium-term budget projection.</p>

<p>Spătaru also reminded that PM Marcel Ciolacu repeatedly said that there would be no tax hike "because we want to convey a message of support to the economic environment."</p>

<p><em>iulian@romania-insider.com</em></p>

<p><em>(Photo source: Inquam Photos/Octav Ganea)</em></p>