“The budget deficit is expected to widen to 8.6% of GDP from 6.7% of GDP. Three percentage points of this deficit stem from the impact of the crisis,” said Citu.
The current projected budget gap is five percentage points higher than the 3.6% target set out at the beginning of the year. The finance minister said the five percentage point difference is directly related to the coronavirus crisis.
The government has also revised its estimates for this year’s economic downturn and now expects a contraction of 3.8% of GDP from a previous estimate of 1.9%. The projection is still more optimistic than the European Commission’s and the IMF’s, which see the Romanian economy contracting by 5% to 6%.
A flash reading by the country’s statistics board Friday showed Romania’s economy contracted 10.5% in annual terms in the second quarter after unexpected annual growth of 2.4% in the first quarter.
In the first six months of the year, Romania’s GDP contracted 4.9% in unadjusted data and 3.9% in real terms.