Thursday, April 30, 2009

Romania runs Q1 budget deficit of 1.5 pct/GDP

BUCHAREST, April 29 (Reuters) - Romania recorded a consolidated budget deficit of 1.5 percent of gross domestic product in the first quarter of the year, as the world crisis slashed tax receipts, the finance minister said on Wednesday.

Preliminary data earlier this month had showed a first quarter shortfall of 1.56 percent of GDP. In the same period of last year, the European Union state ran a virtually balanced budget, with a surplus of 0.02 percent of GDP.

Romania has switched from being the EU's fastest-rising economy to one of its most vulnerable in just a few months, as its dependence on evaporating foreign cash exposed it to a potential financing crisis.
In March, it secured a 20-billion-euro, IMF-led aid package designed to underpin markets and pump fresh cash into the battered emerging economy.

While the money is conditional on a broad package of fiscal reforms, the IMF has allowed the centre-left government to target a deficit of 4.6 percent of GDP this year, under Romanian accounting standards -- 5.1 percent under EU methodology.

However, it has set quarterly budget gap ceilings, which must be met or face spending adjustments. For the first quarter, the target stands at roughly 1.6 percent of GDP.

"The consolidated budget deficit for the first three months stands at 7.92 billion lei ($2.51 billion), or 1.5 percent of GDP," Finance Minister Gheorghe Pogea said in a news conference.

Consolidated revenues were 38.06 billion lei, or 7.2 percent of GDP, down roughly 6 percent on the year, as the crisis hurt output and domestic demand. Spending totalled 45.99 billion lei. (Reporting by Luiza Ilie; Editing by Ron Askew)

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