Personnel expenditures of the general consolidated budget are set to be cut by 0.7% of the gross domestic product by 2014, but the main hypotheses that the projections are based on are not mentioned in the strategy – average public sector earnings and the number of personnel considered every year until 2014, shows the Fiscal Council’s opinion on the strategy.
The only information provided concerns the rule of replacing only one in seven employees who leave the public sector, which will continue to be applied in 2012.
The fiscal-budgetary strategy approved on Wednesday by the Government reaffirms its commitment to continue fiscal consolidation, which will be done mainly by cutting spending by 1.9% of GDP in 2014 against 2011.
The Council warns that the fiscal strategy does not offer information on prospective pay rises in the public sector in 2012, only providing for the “implementation in several stages of Law No. 284/2010,” without mentioning the growth percentage considering the budget allocation.
According to the Fiscal Council, a substantial risk when it comes to meeting the targets set for the budget sector salary fund and for the planned budget deficit reduction is posed by final court rulings due between 2012 – 2014, which will award salary rights to public sector personnel, which reached 7.4 billion lei at the end of 2010.
The Fiscal Council is an independent body of experts in macroeconomic and budgetary policies who assist the activity of the Government and of Parliament in drawing up and implementing fiscal and budgetary policies. It is headed by Ionut Dumitru, chief economist of Raiffeisen Bank Romania.
(English version by Daniela Stoican; Editing by Radu Bostan)