IMF Imposes Quarterly Performance Criteria For Romanian Budget – Sources

"The budget deficit will be monitored quarterly, based on the cash execution on a consolidated budget level. Authorities will consult the IMF for corrective measures should revenues and government financing decrease," official sources told MEDIAFAX, quoting the documents convened upon by Romanian authorities with the International Monetary Fund.

 

The Fund established performance criteria regarding the budget deficit for the first two evaluations, in June and September, respectively a level of RON12.13 billion at the half point of the year and RON17.63 billion at the end of the first nine months.

 

The deficit established for this year, worth RON24.36 billion, representing 4.6% of the GDP, is slightly below the absolute level of the deficit registered last year, worth RON24.65 billion.

 

The Ministry of Public Finance will supply monthly data for the evaluation of the budget situation, including net foreign financing, loans from the local financial system, payments in advance from European funds, European funds requested by the Government, debts not yet paid to Fondul Proprietatea, changes in the amount of state bonds, as well as other financing.

 

If the differences between the consolidated budget deficit and the performance criteria are wider than RON200 million each quarter this year, as well as the criteria to be set for 2010, in the second budget correction the Ministry of Finance will consult IMF experts.

 

Revenues to the general consolidated budget are estimated at RON79.72 billion at the end of June and RON121.11 billion after the first none months of the year. The revenue target for the entire year, worth RON166.72 billion, is RON5 billion higher than the level of revenues achieved last year, excluding grants.

 

On the expense side, the index targets set by the IMF show a level of RON87.5 billion at the half point of the year and RON132.35 billion at the end of September. The target for 2009, of RON182.72 billion, is almost similar to the spending level of 2008, namely RON182.41 billion.

 

In addition, non-government guarantees granted to state owned companies and companies in the non-financial private sector will be limited throughout this year to RON6 billion (EUR1.4 billion).

 

The Fund also established limits for budget payments not performed over an interval greater than 90 days. According to IMF data, at the end of last year there were budget debts higher than RON300 million.

 

By the end of the year, authorities need to cut such debts by RON150 million, and in 2010 these debts are to be eliminated.