BNR: Considering the extremely busy election year of 2024, it is not excluded that the correction of the excessive deficit will be complicated / This would have a direct impact on the sovereign rating

Considering the extremely busy electoral calendar from 2024, the additional complication of correcting the excessive deficit in the event of new expansionist measures or the extension of some of those already in force is not excluded. Significant deviations from the budget deficit adjustment trajectory could have a direct impact on the sovereign rating, according to the BNR in the Inflation Report, published on Friday.

In addition, the correction of the current account deficit could also be endangered, with all the consequences it could have on the financing in an orderly manner of the twin imbalances in the economy, the document also states.

Central bankers also note that we are witnessing “apparent difficulties” in reducing the budget deficit in line with the assumed target. “A preliminary set of corrective measures has taken shape pending the completion of the Inflation Report, but it remains difficult to assess the extent to which they will be sufficient to ensure compliance with this year’s adjustment milestone,” say the Report’s authors.

They indirectly confirm the existence of the phenomenon of “greedflation” in the economy, noting in the report: “The maintenance of an accentuated inflationary environment could motivate the further increase of the profit margins of companies”. In addition and in parallel, new inflationary trends could be fueled, with an adverse impact on the purchasing power of the population. Against the background of the erosion of the latter, claims regarding a more alert advance of salaries, differentiated according to the most affected sectors of activity, are not excluded, the authors of the Report conclude.