Friday, November 27, 2009

Romania 10-mo budget deficit flat at 5.1 pct/GDP

BUCHAREST, Nov 26 (Reuters) - Romania's consolidated budget deficit was 5.1 percent of gross domestic product in the first 10 months of the year, unchanged from a month ago, finance ministry data showed on Thursday. 

Earlier this month, outgoing Finance Minister Gheorghe Pogea said the shortfall had inched up to 5.2 percent of GDP, citing better revenue collection and less spending on goods and services.


Under Romania's 20 billion euro aid package from the International Monetary Fund and other lenders, the European Union targets a deficit of 7.3 percent of GDP in December.
However, Romania tends to see budget spending soar in the last two months of the year, boosted by local administrations, a risk magnified in 2009 by a two-round presidential election with a run-off scheduled for Dec. 6.


The IMF, which has delayed loan tranches pending the resolution of government turmoil that culminated with the collapse of a centrist cabinet in October, has said it expected Romania to overshoot its deficit target due to insufficient measures to curb spending.
A key condition for payments to resume is the passing of a credible budget plan for 2010 that envisions a gap of 5.9 percent, which analysts have said could prove a daunting task for the next cabinet to be set in place after the presidential ballot.


In nominal terms, the deficit reached roughly 25.5 billion lei ($9.03 billion). Ten-month revenues were 131 billion lei, or 26.3 percent of GDP, while spending reached 156.6 billion lei.

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