Wednesday, May 27, 2009

Romania Jan-April budget deficit at 1.8 pct/GDP

BUCHAREST, May 26 (Reuters) - Romania recorded a consolidated budget deficit of 1.8 percent of gross domestic product in the first four months of the year, as the world crisis trimmed corporate tax receipts.

Data released earlier this month showed a first quarter shortfall of about 1.6 percent of GDP.

Romania has switched from being the European Union'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 loan 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 not be exceeded or Romania will face spending adjustments. For the second quarter, the target stands at roughly 2.7 percent of GDP.

Asked whether Romania would be able to stick to its agreed budgetary goal for April-June, Finance Minister Gheorghe Pogea said: 'We have a target ... we have to observe that.'

Data showed that in nominal terms, the consolidated budget deficit for the first four months stood at 9.36 billion lei ($3.14 billion).

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