Fiscal Council president: Budget deficit to reach 6% of GDP in Romania in 2018

The unitary pay law would lead to an average increase of 40-50% in public sector wages next year, which will bring the public deficit to almost 6% of the GDP, said Ionut Dumitru, president of the Fiscal Council. Under these circumstances, the Government is left without any measures to compensate for the increases. “It’s game over,” he added, reports local Profit.ro. The wage increases will have a gross impact of RON 25 billion (EUR 5.5 billion) to the state budget or over 1.8% of the GDP, Dumitru explained. “The European Commission mentioned a deficit of 3.9% next year; if we add this 1.8%, we get to 6% of the GDP. The situation is, from my point of view, without escape,” the Fiscal Council president said. Salaries in the healthcare sector will double next year, whereas the ones in education will increase by half. The rest of wages in the public sector will go up by a quarter. “What can the government do? Refrain (...) When you talk about increases of 50%, 100%, it means that things are out of control, we’ve lost all contact with reality,” Dumitru added. He estimates that the Government will need some RON 60 billion to cover for the salary increases in the public sector in the next four years, double the amount estimated in the pay law. editor@romania-insider.com