Romania's new Liberal government led by Ludovic Orban has adopted a fiscal and budget strategy for 2020-2022, accompanying the state budget for next year. Here are key points of the strategy.
1. It says investments would increase gradually to reach 3.83% of the GDP by 2022. But it shows that while they would increase in nominal value, they would in fact drop as percentage of the GDP: 4.15% in 2019 / 4.3% in 2020 / 4% in 2021 / 3.83% in 2022. Nominal value would rise from 43.1 billion lei in 2019 to almost 50 billion in 2022.
2. The finance ministry would continue programs to sell bonds to natural persons.
3. Treasury would retain the financial buffer in hard currency at the qeuivalent value covering gross funding needs.
4. Diminishing excise levels starting January 1, 2020 for gasoline and diesel.
5. It envisages that a relaunch of demand on the real estate market would lead to more action in construction works.
In a speech before the MPs on Thursday, as his government took responsibility before the Parliament for a series of laws, PM Ludovic Orban said that the budget for 2020 would not be able to cope with any supplementary spending as any extra spending would lead to the incapacity of making vital payments.
Orban's government has been blaming the previous Social Democratic government of reckless spending leading to increased budget deficit prospects.