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iates deliberately and substantially from the fiscal rules imposed by both national laws and European treaties signed by Romania"5. In conclusion, based on the information provided in the convergence programme, the past, planned and forecast fiscal performance in 2017-2018 Romania appears to significantly depart from the requirements of the applicable national numerical fiscal rules. Romania's national Fiscal Council has not been involved in the production nor endorsement of the macroeconomic forecast underpinning the convergence programme. As a non-euro area country, Romania is not required by the Regulation (EU) No 473/2013 to have an independent body to do so. However, when assessing the 2017-2019 Fiscal and Budgetary Strategy, the Fiscal Council referred to "highly optimistic" macroeconomic scenario for 2017 and "extremely favourable" macroeconomic projection over the medium-term, which in conjunction with underestimated budget expenditure for 2017, could lead to higher than projected deficits. 7. SUMMARY In 2016, from a position of -0.6% of GDP in 2015, i.e. above the MTO, the structural balance deteriorated to -2.6% of GDP, pointing to a significant deviation from the MTO. The growth of government expenditure, net of discretionary revenue measures and one-offs, was well above the expenditure benchmark, also pointing to a significant deviation. The overall assessment points to a significant deviation from the requirements of the preventive arm of the Stability and Growth Pact in 2016. 3 In particular the fiscal responsibility law no. 69/2010 (amended by law no. 377/2013). 4 Fiscal Council’s opinion on the State Budget Law, the Social Insurance Budget Law for 2016 and the Fiscal Strategy for 2016-2018, available at http://www.fiscalcouncil.ro/Opinii-eng-2015.pdf 5 Fiscal Council's opinion on the State Budget Law, the Social Insurance Budget Law for 2017 and the Fiscal Strategy for 2017-2019, available at http://www.fiscalcouncil.ro/OpinionStateBudget2017.pdf 16 In 2017 and 2018, a significant deviation from the adjustment path towards the MTO is expected both based on the programme and based on the Commisison 2017 spring forecast, putting at risk the compliance with the requirements of the preventive arm of the Pact. Moreover, although the programme projects the headline deficit to amount to 2.9% of GDP in 2017, according to the Commission 2017 spring forecast Romania's deficit is projected to exceed the 3% of GDP reference value in 2017 and in 2018 based on a no-policy change assumption. 17 8. ANNEX Table I. Macroeconomic indicators 1999- 2004- 2009- 2014 2015 2016 2017 2018 2003 2008 2013 Core indicators GDP growth rate 3.7 7.2 -0.5 3.1 3.9 4.8 4.3 3.7 1 Output gap -2.3 5.7 -3.6 -2.4 -1.3 -0.1 0.7 0.8 HICP (annual % change) 32.7 8.1 4.8 1.4 -0.4 -1.1 1.1 3.0 2 Domestic demand (annual % change) 4.5 11.3 -2.5 3.4 5.5 5.5 5.0 4.5 3 Unemployment rate (% of labour force) 7.6 6.9 6.9 6.8 6.8 5.9 5.4 5.3 Gross fixed capital formation (% of GDP) 20.5 29.5 26.2 24.3 24.8 22.7 22.2 22.4 Gross national saving (% of GDP) 15.1 16.2 22.4 24.5 24.4 22.6 21.6 21.6 General Government (% of GDP) Net lending (+) or net borrowing (-) -3.1 -2.5 -5.5 -1.4 -0.8 -3.0 -3.5 -3.7 Gross debt 23.1 14.5 32.5 39.4 38.0 37.6 39.3 40.9 Net financial assets 33.8 14.1 -11.3 -21.1 -20.4 -21.6 n.a n.a Total revenue 33.1 33.2 33.0 33.5 35.0 31.7 30.6 31.5 Total expenditure 36.3 35.7 38.5 34.9 35.8 34.7 34.1 35.2 of which: Interest 3.3 1.0 1.6 1.6 1.6 1.5 1.6 1.6 Corporations (% of GDP) Net lending (+) or net borrowing (-) -3.9 -3.2 6.9 -3.8 -5.6 -3.9 -4.0 -3.8 Net financial assets; non-financial corporations -84.3 -97.3 -87.0 -89.8 -86.2 -82.4 n.a n.a Net financial assets; financial corporations 0.3 -1.5 3.1 4.0 3.7 1.9 n.a n.a Gross capital formation 15.3 20.9 15.9 15.7 14.7 15.1 14.7 14.6 Gross operating surplus 23.3 26.0 29.5 32.2 31.8 32.5 31.0 30.1 Households and NPISH (% of GDP) Net lending (+) or net borrowing (-) 3.3 -4.1 -4.2 7.2 8.2 6.9 6.9 6.7 Net financial assets 34.0 45.0 31.9 49.7 51.0 51.1 n.a n.a Gross wages and salaries 31.0 31.3 28.8 27.9 27.8 28.7 29.8 30.2 Net property income 4.9 0.7 3.3 17.6 18.1 16.7 15.7 14.7 Current transfers received 14.9 14.7 14.7 13.4 13.7 13.6 13.9 13.9 Gross saving -2.1 -5.9 -1.2 10.4 11.4 11.5 11.4 11.1 Rest of the world (% of GDP) Net lending (+) or net borrowing (-) -3.8 -9.9 -2.6 2.5 1.8 -1.5 -1.3 -0.8 Net financial assets 18.9 41.4 65.9 59.4 54.0 53.2 n.a n.a Net exports of goods and services -6.1 -11.7 -4.8 -0.4 -0.6 -0.9 -1.9 -2.3 Net primary income from the rest of the world -1.2 -3.0 -1.2 -1.0 -1.9 -2.9 -2.5 -2.4 Net capital transactions 0.3 0.5 0.9 2.6 2.4 0.9 1.5 2.0 Tradable sector 59.4 55.0 51.1 49.8 49.8 50.6 n.a n.a Non tradable sector 30.3 33.7 37.5 38.7 38.0 39.1 n.a n.a of which: Building and construction sector 5.7 8.3 8.3 6.2 5.8 6.0 n.a n.a Real effective exchange rate (index, 2000=100) 71.4 93.7 94.1 92.5 86.5 88.4 91.1 92.0 Terms of trade goods and services (index, 2000=100) 73.3 87.5 100.5 103.2 106.4 107.1 106.5 107.4 Market performance of exports (index, 2000=100) 71.4 90.5 107.6 131.5 131.4 137.4 140.8 142.8 Notes: 1 The output gap constitutes the gap between the actual and potential gross domestic product at 2005 market prices. 2 The indicator on domestic demand includes stocks. 3 Unemployed persons are all persons who were not employed, had actively sought work and were ready to begin working immediately or within two weeks. The labour force is the total number of people employed and unemployed. The unemployment rate covers the age group 15- 74. Source : AMECO data, Commission 2017 spring forecast 18