Thursday, September 17, 2009

Romania 8-month budget gap at 4.4 pct/GDP

BUCHAREST, Sept 16 (Reuters) - Romania's estimated consolidated budget deficit rose to 4.4 percent of gross domestic product in the first eight months of the year, Deputy Finance Minister Gheorghe Gherghina said on Wednesday.

Romania plunged into recession at the start of the year as the global economic crisis slashed domestic consumption, froze lending and dried up foreign investment.

To avoid a potential financing crisis, the European Union state turned to the International Monetary Fund for a 20 billion euros aid package. In return for aid, Romania must enforce deep cost-cutting reforms of its public administration.

During January-July, Romania's deficit reached 17.6 billion lei, or 3.3 percent of a GDP estimated at 531.2 billion lei.

Since then, Romania revised its budget to reflect a deeper than forecast recession, lowering its GDP expectation to 497.3 billion lei and raising its end-year budget deficit target to 7.3 percent of GDP from 4.6 percent.

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