The budget deficit is mainly due to inefficient revenue collection and a large number of exceptionsaccording to the presentation made by the former director of the Financial Stability Office of the BNR, Eugene Redulescu.

“Our biggest problem is the budget deficit. We had a brief period in 2013-2015 where we achieved the famous SDR in a way that reduced the pressure of the national debt, but that did not last long. After 2019, after the start of a new wave caused by COVID, but not only, the situation has gotten relatively much worse,” he said, clarifying from the beginning that this is the NBR’s point of view.

In 2022, says Redulescu, we had only one country with a bigger budget deficit than Romania: that was Italy in the EU.

“Our share of budget revenues in GDP is 27%, the lowest in the EU, and the average level is 41%. This means that reducing the state deficit by one percentage point is much more difficult to achieve in an economy like Romania’s than in an economy where the share of budget revenues is about 40-45% of GDP,” he said.

• “The government’s room for maneuver to reduce the budget deficit is very limited, given that a very high degree of expenditure rigidity remains.”

The great hope, according to him, lies in the development of PNRR funds, which is important for balancing the slowdown in economic activity and promoting the acceleration of the transition to “green” and digitalization of the economy. This means joining the world if we can get funds from PNRR.

“The current account deficit continued to worsen. It is inevitable. A current account deficit always reflects a budget deficit. The budget deficit can be covered only if domestic savings exceed the budget deficit. This does not happen,” said Redulescu.

• “As a result, we still have the current account as a share of GDP at a very high level, the deficit is very high, which forces us to take corrective measures sooner or later.”