Friday, June 29, 2007

Romanian Posts 0.16 Pct. Budget Surplus

BUCHAREST, Romania (AP) - Romania posted a budget small surplus of 0.16 of gross domestic product during the January-May 2007 period, but the government planned to increase spending to deal with a severe drought, the Finance Ministry said Thursday.

Total budget revenue through May was 47.75 billion lei (euro15 billion or US$20.2 billion), about 12.2 percent of GDP, while spending totaled 47.15 billion lei (euro14.9 or US$20.07), or 12.1 percent of GDP, the ministry said.

The government had forecast a 2.8 percent deficit for this year, but the European Union warned it could be higher, reaching 3.2 percent of GDP -- above the EU deficit limit of 3 percent of GDP.

European Commissioner for Economic and Monetary Affairs Joaquin Almunia warned Romania last month it could face disciplinary action over its deficit.

On Wednesday, Romanian Prime Minister Calin Popescu Tariceanu said the government would not be able to lower the deficit because it needed to spend on agricultural subsidies to fight the effects of drought.

The government is scheduled to hold a special budget revision meeting to allocate additional funds for agriculture, health and transportation.

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