With regard to budget revenues, the Fiscal Council considers a likely manifestation of a revenue gap compared to the target indicators provided for in the budget correction project, in the amount of about 9 billion lei, which is approximately 0.66% of GDP, according to the conclusion of the Fiscal Council regarding the subject of priority amendments to the budget from in 2022.

“And in terms of budget expenditures, there is a proportional increase compared to the parameters approved by the draft budget, mainly due to the addition of expenditures on social assistance, other transfers and interest. Regarding budget expenditures, the CF sees an underestimation of 6.2 billion lei, i.e. 0.45% of GDP, assuming that the data sent by the Ministry of Finance on the impact of measures in the energy sector are the ones estimated by the correction project,” the source was quoted as saying.

In fact, the Fiscal Council says, the large-scale review of budget revenues has two main sources:

1. upward revision of nominal GDP dynamics (against high inflation, increase in GDP deflator forecast from 5.8% to 12.2%);

2. additional revenues from retaxation of electricity and natural gas producers.

“Analyzing the changes made by the budget correction project at the level of the main aggregates of income and expenditure, the CF estimates that the likely budget deficit, which should be achieved according to the cash methodology, will be about 7% of GDP (compared to 5.84% of GDP). % of GDP in the adjusted budget forecast), but it should be said that this shortfall takes into account revenues received from surcharges of more than 12.8 billion lei and total costs to energy suppliers of approximately 7.4 billion lei (i.e.

as provided by the amendment). The postponement of some payments to 2023 increases the difference between the cash deficit and the EUS deficit in 2022,” the Fiscal Council said in a statement.

• If there is an underestimation of the impact of costs on the energy compensation scheme, which is likely, the deficit will inevitably increase significantly.
• And the unfavorable price situation on the markets puts additional pressure on the budget. Such underspending of the energy compensation scheme poses a great risk to the budget and fiscal consolidation.

“As emphasized in other Fiscal Council documents, European resources from the PNRR (National Recovery and Resilience Plan) and CFM (Multiannual Financial Framework) represent the only countercyclical force that can counteract the contractionary effects of fiscal consolidation. absorbing a significant portion of these financial resources, both non-reimbursable and reimbursable, is vital for Romania, given the state of the public budget and

the vulnerability of the external balance, the extremely unfavorable international environment,” the Fiscal Council notes.