Thursday, July 2, 2009

Romania govt H1 budget gap at 2.7 pct/GDP

BUCHAREST, July 2 (Reuters) - Romania's recorded a budget deficit of 2.7 percent of gross domestic product in the first half of 2009, meeting targets set under a deal with the International Monetary Fund, Finance Minister Gheorghe Pogea said.

'We have a consolidated deficit of 14.418 billion lei, meaning 2.7 percent of GDP,' Pogea told a news briefing late on Wednesday.

'We are 0.03 percentage points below the (IMF) target, so we can say that up to now, we have fulfilled our commitments.'

Romania's large external imbalances have forced it to seek help from international institutions, including the IMF. It secured a 20 billion euro aid package in March.

Under the terms of the deal, Romania needs to slim its budget deficit to 4.6 percent of GDP in Romanian accounting standards.

Like many of its neighbours, Romania saw its economy deteriorate faster than expected due to global crisis and policymakers warn the IMF forecast for a 4-percent contraction this year may be exceeded.

This could threaten budget targets and Pogea said last month that he counts on flexibility from the IMF if the economy shrinks faster.

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