Next year's budget deficit target, of 3% of GDP, seems to be challenging and ambitious and may require additional measures of tightening budget spending and an improvement in tax collection, although economic activity is projected to accelerate in 2012, according to Ionuţ Dumitru, president of the Fiscal Council.
Under the circumstances, the wages fund could increase by a mere 5% next year, while pensions could be raised by at least 7%.
"There are personnel spending caps that have been set for 2012, to keep within 7.1% of GDP, according to the targets already committed to. Based on the latest version of the fiscal-budgetary strategy and of the law regulating spending caps, we can say there is a potential for the wage fund to grow by 5% in order to keep within 7.1% of GDP next year. Of course, if the GDP is higher, we can operate higher increases," said Dumitru at a conference where he presented the annual report of the Fiscal Council.
The wage fund includes the number of employees and the average wage, which means wages can increase by more than 5% next year if the personnel is cut, explained Dumitru.
This year's economic growth forecast is 1.5%, with the GDP to rise 3.9% next year. In 2011 the budget deficit is set to be cut to 4.4% of GDP, a target considered manageable.
The Fiscal Council is an independent authority with five members who provide assistance to the Government and Parliament in devising and implementing fiscal-budgetary policies.
Next year's budget deficit target, of 3% of GDP, seems to be challenging and ambitious and may require additional measures of tightening budget spending and an improvement in tax collection, although economic activity is projected to accelerate in 2012, according to Ionuţ Dumitru, president of the Fiscal Council.
Under the circumstances, the wages fund could increas
