The budget execution for January 2017 shows a decrease in revenue by nearly 6% (a nearly 24% decrease in VAT collection) and an increase of 3.5% in expenses. Despite that, it was registered a budget surplus.
AHK Romania recently warned that an increase in the minimum wage and, in wages, in general, without a directly proportional relation with productivity and without considering the major differences between parts of the country, will not only unbalance the state budget on the short term, but it will also trigger significant disadvantages of the Romanian economy and mainly of some geographical and economic areas disadvantaged on the medium and long term. Also, a high budget deficit on a long term can have negative effects for Romania and on international financial markets in the future.
Anastasiu also said the budget execution for January 2017 can only strengthen the fear that the country’s budget might not fall within the deficit target set at below 3%, and if this happens, the entire economy and the Romanian people will bear the consequences.
The European Commission said in its 2017 country report regarding Romania that, by inverting the consolidation trend, the fiscal policy became procyclical in 2016 and the public deficit is on the rise. Thus, under the impact of significant tax cuts and an increase in costs, the public deficit will rise to 3.6% in 2017 and to 3.9% in 2018.
Nevertheless, the Finance Ministry on Tuesday sent a letter to Brussels ensuring the European Commission that Romania would not exceed the deficit target.
AHK Romania is the official representative of the German economy and also the biggest bilateral Chamber of Commerce in Romania. Established in 2002, AHK Romania currently has over 570 member firms.