December 17 (SeeNews) - Romania's finance ministry expects economic growth of 4.1% and cash budget deficit equivalent to 3.58% of gross domestic product (GDP) next year, it said on Tuesday.
GDP is expected to grow to 1.129 trillion lei ($236 billion/212 billion euro) next year, the finance ministry said in the 2020 draft budget published on its website.
An average exchange rate of 4.75 lei per euro and a net monthly average monthly salary of 3.324 lei is projected in the 2020 budget.
Average 2020 inflation is forecast at 3.1%. Romania's consumer prices rose by 3.77% year-on-year in November, compared to an increase of 3.4% in the previous month, according to the latest data available from the national statistical office.
The budget deficit (cash) is projected at 3.59% of GDP, while the deficit under the European System of Accounts (ESA) standards is forecast at 3.58% of GDP. The ministry aims to narrow the gap to 1.94% by 2023, in order to return to the deficit target of below 3% envisaged in the Maastricht Treaty, the buget draft reads.
According to the Maastricht Treaty signed in 1992, the ratio of the annual general government deficit relative to GDP at market prices must not exceed 3% at the end of the preceding fiscal year.
Budget revenues are projected at 360.14 billion lei, or 31.89% of GDP, while expenditures are forecast at 400.69 billion lei, or 35.48% of GDP.
Investment spending is seen at 50.7 billion lei in 2020, or 4.5% of GDP.
On Monday evening, prime minister Ludovic Orban said in a televised statement that the government is likely to take responsibility before parliament for the 2020 budget bill, in order to avoid lengthy procedures. According to Romania's constitution, a bill for which the government takes responsibility before parliament can be passed only if the cabinet is not dismissed through a no-confidence motion filed in the following three days.
If the bill passes, it must then be promulgated by president Klaus Iohannis.
Romania's finance ministry expects 4% economic growth in 2019 and a consolidated budget deficit of 4.3% of the projected GDP. Romania's economy expanded by 4.1% year-on-year in 2018, compared to a growth rate of 7% in the previous year.
(1 euro = 4.7781 lei)