Fiscal Council President On Pay Law: Budget Deficit Could Reach 5.7% Of GDP In 2018

The impact of the unitary pay law over the budget deficit is double versus that presented by the government, reaching RON50-60 billion; thus, budget deficit could reach 5.7% of GDP in 2018, according to Fiscal Council president Ionut Dumitru.

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Fiscal Council President On Pay Law: Budget Deficit Could Reach 5.7% Of GDP In 2018

“According to the first estimations, the impact of the new pay law is much higher than what government said. We were told that the impact would be of approximately RON30 billion, cumulated in four years, but the impact is almost double, nearly RON50-60 billion. At the moment, we don’t have all the information for an exact estimation. (…) The budget impact could reach RON25 billion in 2018, or 1.8% of GDP, net impact,” Dumitru stated.

The Fiscal Council president said that it is hard to identify compensation measures for reducing the budget deficit.

“Figures talk for themselves. It’s beyond imagination. While the European Commission estimated a budget deficit of 3.9% without wage hikes in 2018, we are now adding 1.8% of GDP only from the unitary pay law. What compensation measures could cover something like that?“ Dumitru said.

 

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