January 28 (SeeNews) - Romania's consolidated budget was in deficit equivalent to 4.6% of the estimated gross domestic product (GDP) at the end of last year, exceeding the ceiling set by the government, finance minister Florin Citu said on Tuesday.
"The execution of the consolidated budget ended with a 4.6% deficit in 2019, above the 4.4% deficit level established in November following the budget adjustment," Citu said in a televised news conference broadcast by Digi 24.
At the end of November, the finance ministry increased the planned 2019 deficit to 4.4% from its initial target of 2.76% as a result of poor tax collection and higher expenses.
According to Citu, the 0.2% difference compared to November came as a result of bills which had been due for years and had to be paid.
Such examples are a 912.5 million lei ($212.5 million/190.9 million euro) compensation which the government paid to two investors in a state aid case in December and approximately 1.3 billion lei worth of dividends due but not paid by state-owned companies.
"These are two things that we could not avoid," Citu said, adding that the underperforming 2019 budget envisaging a 2.76% deficit, crafted by the previous leftist government, was the source of all problems.
The finance minister stressed that last year's wider-than-planned budget gap will not impact the 2020 budget based on projections for economic growth of 4.1% and cash deficit equivalent to 3.59% of GDP.
Earlier this month, Romania's Fiscal Council said that the 2020 consolidated budget deficit could increase to up to 4.8% of GDP if the government does not make necessary adjustments.
"Considering the information available at this point in time, we estimate the 2020 budget deficit within a range of 4.6% - 4.8% of GDP, resulting in a deviation from the finance ministry's target by 1 - 1.2 pp. This very complicated situation calls for further measures of consolidation," the Fiscal Council said in an analysis of the budget published on its website.
(1 euro = 4.7798 lei)