Wednesday, November 11, 2009

Romania 10-mo budget gap inches up to 5.2 pct/GDP

BUCHAREST, Nov 10 (Reuters) - Romania consolidated budget recorded a deficit of 5.2 percent of gross domestic product in January-October, barely up from September's 5.1 percent deficit, outgoing Finance Minister Gheorghe Pogea said on Tuesday. 

Under Romania's 20 billion euro aid package with the International Monetary Fund, the European Union state must end 2009 with a shortfall of 7.3 percent of GDP.

However, the IMF, which stopped a review of Romania's aid deal on Friday and delayed rescue funds pending the resolution of a political crisis, said they expected the government to overshoot this year's target.

Romania has tended to see large spending jumps in the last two months of the year, a risk heightened in 2009 by political noise ahead of an upcoming presidential election on Nov. 22.

"The budget execution was better in October because we had adequate revenues and spending on goods and services was not that large," Pogea said without elaborating.
Analysts have said the next government will face a daunting task of keeping spending in check next year and bringing the deficit down to 5.9 percent of GDP, a vital benchmark for Romania's agreement with the IMF.

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