BUCHAREST (Romania), November 26 (SeeNews) - Romania's finance ministry said on Tuesday that it has increased the consolidated budget deficit target for 2019 to 4.3% of the projected gross domestic product (GDP), from an initial estimate of 2.76%.
Also, the ministry has decided to lower the economic growth projection for 2019 to 4.0% from previously forecast 5.5%, according to the budget revision draft published on the ministry's website.
The decisions were taken as a result of poor tax collection and higher expenses, the ministry explained.
The budget deficit for 2019 is seen at 44.72 billion ($10.3 billion/9.3 billion euro) lei, compared to a previous forecast of 28.45 billion lei.
Romania's consolidated budget showed a deficit equivalent to 2.8% of the projected 2019 GDP in the ten months through October, compared to a gap of 2.2% of GDP a year earlier, the finance ministry said on Tuesday in a separate press release.
Earlier this month, liberal finance minister Florin Citu said that the budget gap could widen to 4% of gross domestic product this year and accused his Social Democrat predecessor Eugen Teodorovici of deliberately faking numbers.
On November 20, the European Commission said that Romania needs to prevent a possible widening of its budget deficit beyond the 3% threshold agreed with the EU.
"Romania needs to take the necessary measures to ensure that the nominal growth rate of net primary government expenditure does not exceed 4.4% in 2020, corresponding to an annual structural adjustment of 1.0% of GDP, thereby putting the Member State on an appropriate adjustment path toward the medium-term budgetary objective," the Commission said in its 2018 country-specific recommendations on Romania, a part of the European Semester Autumn 2019 Package.
A National Liberal Party (PNL) government took office in Romania earlier this month after the Social Democrat cabinet led by Viorica Dancila lost a no-confidence vote on October 10. The vote was requested by PNL who accused the Dancila government of incompetence.
(1 euro=4.7722 euro)