Romanian government approves 2022 budget plan, says it will reduce deficit

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BUCHAREST, December 20 (Reuters) – Romania’s coalition government on Monday approved a budget plan for 2022 that pledges to reduce the deficit while using European Union stimulus funds to boost investment.

The budget plan is based on an economic growth assumption of 4.6% and targets a deficit of 5.8% of gross domestic product, down from the deficit of 7.1% this year, the finance ministry said. . Read more

The project is now going to parliament, which Prime Minister Nicolae Ciuca hopes to approve by Friday.

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But party leaders in the grand coalition government disagreed on spending plans on Monday, with Liberal Party leader Florin Citu saying investment plans should rise to 7% of GDP in the year next, a key issue during ministerial negotiations which also covered the increase in state pensions and family allowances.

The draft budget currently projects that the EU member country will increase investment to 6.7% of GDP next year, from an estimated 5.6% in 2021, although analysts say weak institutional capacity means that the government will find it difficult to meet its targets.

The Romanian leu was stable against the euro on Monday, but fell 1.7% overall this year, the region’s worst result, weighed down by political instability and large budget and current account deficits.

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Reporting by Luiza Ilie, editing by William Maclean

Our Standards: Thomson Reuters Trust Principles.

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