Romania’s budget for 2017 is “too optimistic and overvalued”, says president Iohannis

Romania’s president Klaus Iohannis has warned that this year’s draft budget includes a sharp increase of public expenditure, adding that it is based on an economic growth estimate that could be hard to achieve this year.

After certain components of the draft budget referring to the national defense were approved in a meeting of the Supreme Council of National Defence (CSAT), Iohannis said:

“This budget, which has been prepared by the Government and is ready to be submitted to the Parliament looks troublesome. This budget includes a sharp increase of expenditure and, in the opinion of specialists and in my view, this budget is too optimistic. It is an overvalued budget, without a pertinent explanation for this significant growth – of around 15 percent. Even if we take into account the fact that the Romanian economy will grow, a thing we all want, such a big growth rate is hard to achieve,” said the president.

The defense budget has been set at 2 percent of GDP this year, in line with NATO’s requirements.

The draft budget of the center-left government is based on an economic growth forecast of 5.2 percent of GDP this year and a budget deficit of close to 3 percent.

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The banks in Romania have forecasted an economic growth rate of around 4 percent of GDP this year, while the World Bank estimates that the local economy will expand by 3.7 percent of GDP.

Ovidiu Posirca