Friday, February 29, 2008

Romania's budget deficit at 2.6 pct/GDP in 2007

BUCHAREST, Feb 28 (Reuters) - Romania recorded a preliminary government budget deficit of 2.6 percent of gross domestic product last year in international terms, Finance and Economy Minister Varujan Vosganian said on Thursday.

Romania, which originally reported a 2.4 percent gap last year in local accounting standards, targets a budget shortfall of 2.7 percent of GDP for 2008.

But the European Commission has said that using Brussels calculations Romaia's deficit would be abouve its 3 percent Maastricht cap.

"Preliminary data showed the deficit was 2.6 percent of GDP," Vosganian told a news conference.
Vosganian, who said the figure might suffer a modest reduction as a percent of GDP as a result of 2007 GDP data due to be released next week.

The nominal GDP estimated for 2007 is 390 billion lei, but this could be exceeded, he said.
The government has recently been chided by international observers and ratings agencies for its loose fiscal stance and not doing enough to control domestic consumption which is feeding inflation and overheating the economy.

It plans to cut the deficit target to as low as 2 percent of GDP in international terms, a budget revision expected to take place as early as next week. (Reporting by Marius Zaharia; Writing by Radu Marinas, Editing by Ron Askew)

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