Tuesday, February 5, 2008

Romania govt backs 'cautious' approach to keep 2008 inflation in check

BUCHAREST (Thomson Financial) - Romanian Prime Minister Calin Tariceanu has advocated a 'cautious' economic policy in 2008 to avoid slip-ups and keep a check on inflation, which accelerated in the second half of 2007.

Tariceanu said at a press conference the government is proposing to carry out prudent approach to support sustained economic growth, without unsettling the economy.

He added such caution is even more necessary during the current period of international financial crisis.

Tariceanu, speaking after a meeting with central bank governor Mugur Isarescu, said the government would not give 'gifts' to the electorate in a year of municipal and legislative elections, and promised wage increases would not exceed the increase in productivity.

Meanwhile, Tariceanu said Romania plans to reduce the budget deficit below the 3 pct of GDP level required by the treaty of Maastricht, thanks to higher tax revenues than had been predicted.

Having repeatedly called for a restriction in public expenditure, Isarescu said he wanted to praise the government for commitment to a reasonable wage policy.

Isarescu underlined the importance of a correlation between monetary, financial, wage and structural policies to support fast economic growth at around 6 pct of GDP while keeping inflation within the 4.3 pct limit envisaged for 2008.

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