BUCHAREST, Aug. 20 (Xinhua) -- Romania's fiscal deficit is expected to surpass 7 percent of GDP in 2024 and has the potential to rise towards 8 percent, said Romania Fiscal Council's annual report on Monday.
The report comes after the first half of 2024 recorded a deficit of 3.6 percent of GDP, driven by a significant increase in public spending, only partially offset by better-than-expected budget revenues.
The initial deficit target of the 2024 budget was 5 percent of GDP under national methodology and 4.9 percent under the European system of national and regional accounts 2010. However, the council now projects a higher deficit due to additional costs from new pension legislation and public sector wage increases in the latter half of the year.
The report highlights the urgent need for Romania to implement significant fiscal consolidation measures, as the planned reduction of the deficit heavily relies on controlling public spending.
The government is expected to submit a budgetary plan to the European Union (EU) in September 2024, aiming to bring the deficit below 3 percent through structural reforms and efficient use of EU funds. ■