Tuesday, February 10, 2009

Romania budget revenues down 8.7 pct y/y in Jan

BUCHAREST, Feb 10 (Reuters) - Romania's budget revenues fell 8.7 percent on the year to 13.82 billion lei ($4.19 billion) in January, data from the finance and economy ministry showed on Tuesday.

Romania's cabinet has pledged to keep spending under a tight leash and cut the consolidated budget deficit to 2 percent of GDP, after lavish social spending by the previous government upped it to more than 5 percent of GDP at the end of 2008.

But analysts say the shortfall goal is unrealistic as the revenue target is at risk due a sharp slowdown in growth.

The revenue figures announced on Tuesday, which cover the main components of the budget, amounted to roughly 2.4 percent of the government's gross domestic product forecast for this year.

The centre-left coalition government of Prime Minister Emil Boc targets revenues of 33.5 percent of GDP this year, or 193.8 billion lei, up from the 32 percent collected in 2008.

The government estimates the economy will grow 2.5 percent this year, from just under 8 percent in 2008.

Economic pain is increasingly visible as thousands of workers are laid off and major manufacturers such as ArcelorMittal announce repeated work stoppages.

Since the global credit crunch intensified in recent months, concern has grown that Romania is more vulnerable to an economic downturn than some of its peers because of a vast external shortfall, high rates of hard currency borrowing and loose fiscal plans.

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