This indicator is proposed to be adopted in the Moldovan legislation. This level is fixed in the EU directives. Today in Moldova the legislative limit is 2.5% of GDP. Although in reality, in 2025 it will reach 5.1%.
The Finance Ministry submitted for public consultations amendments to the Law on Public Finances and Fiscal Responsibility. The amendments are designed to harmonize the Moldovan legislation with the European legislation, as well as to improve the management of public finances.
Also, according to the draft, the law introduces an obligation to observe the admissible level of the ratio between the public debt and the GDP. It is set at 60%. At the same time, if the debt is in the range of 50-60% of GDP, the deficit is limited to 2% of GDP, and if the threshold of 60% is exceeded, the deficit is limited to no more than 1% of GDP.
In addition, temporary deviations from the allowed values will be allowed only for up to three years and only in exceptional cases – in case of an emergency, a serious economic downturn or a systemic financial crisis.
At the same time, the government will be obliged to justify the reasons for deviating from the tax rules and present a plan to return to compliance with them in budget documents and the medium-term budget forecast.
The amendments stipulate that the deficit level is set depending on the amount of public debt and the ability to service it. It is assessed through the ratio between the annual servicing of public debt and the national public budget revenues.
In case this ratio exceeds 10%, the deficit cannot exceed 2% of GDP until the ratio drops below the established level.
