Romania's deficit storm worsens with rising wage and social expenses.
Romania’s budget deficit rose by 61 percent in January-September compared with the first nine months of last year as the government struggles with soaring wage and social spending.
Official data show that budget revenues rose by 11.6 percent year-on-year in January-September, while expenses increased by 15.3 percent.
The general budget in January-September closed with a deficit 2.62 percent of estimated GDP.
Last year, Romania registered a budget deficit of 3.02 percent of GDP, slightly exceeding European Union’s ceiling of 3 percent of GDP.
Experts have been concerned about the rapid increase of government’s interest expenses which rose 27.8 percent last year although the Romanian Finance Ministry argues that they are doing a better job of controlling interest expenses this year.
Romania, however, remains the EU member paying the highest interest rates for its debt.
Running out of revenue sources, the government has introduced this year a tax on bank assets and special taxes of 2 percent of turnover on energy firms and 3 percent on telecom companies.
Many worry that the deficit could approach 4 percent of GDP, exceeding the EU ceiling of 3 percent, without additional fiscal measures.