IMF Sees Romanian Economy Contracting 4% In 09, Budget Def At 6% Of GDP

The IMF bases its forecast on the international financial crisis, the sharp contraction in Romania’s main trade partners that will lead to an abrupt drop of the country’s exports, but also on the local poor infrastructure, said Dumitru Costin, president of the National Trade Unions Bloc.

As regards the budget deficit, the union leader said IMF does not think the government can keep the gap below 2% of the GDP, and the institution’s forecasts are between 2% and 6% of the GDP.

Costin also said the Cabinet has to show the IMF how it plans to finance the deficit.

Romanian authorities are negotiating with the IMF, the E.U. and other international institutions a financial package that could amount to EUR19 billion.

Official sources told MEDIAFAX last week the Government negotiates with the IMF and the European Commission a budget deficit of around 4% of the GDP in 2009, above the initial target of 2%, on the backdrop of revising down the budget revenues.