The Čolak government’s fiscal package will, in theory, reduce the budget deficit by 1 percentage point, to 4.7% in 2024, according to the statements of the chief monetary policy advisor to the head of the National Bank of Romania, Lucian Croitoru.

He stated that he was making statements not as a representative of the BNR, but as an economist.

Lucian Croitoru mentioned three risks regarding the expected consequences of the fiscal package.

1. Pension law

“We have to implement the pension law. This is a condition for access to the fourth payment from PNRR. After that, it also calls for amendments to the Act, as we want it to remove inequality between categories of pensioners. The expected impact of this law is approximately 0.7-0.8 percentage points of GDP,” Kroitoru said during an event organized by CursDeGuvernare.ro.

• We now know that the Government intends to introduce it from September 1, 2024.

“It reduces the risks. It could be applied earlier, which would increase budget costs. We cannot rule out any further use of it. Technically, it may be necessary,” said the economist.

2. The law of wage uniformity.

“This law has not been developed. We don’t know what it looks like yet, but it’s clear that it’s by design (it isn’t). In an election year, for example in 2024, the risk of raising wages in one area will lead to a chain effect and slippage,” he explained.

In his view, it could undo everything the tax package does now.

3. Excise tax on fuel

If the current fuel excise legislation continues to apply, the tax package will not be enough.

According to him, theoretically, the excise duty will be increased, which will lead to a 34% increase compared to last year, in fact “returning to the calculation formula”.