Romania, IMF Set 2010 Budget Def Below 6% - Sources

Romanian authorities and the International Monetary Fund have agreed on a budget deficit below 6% of the gross domestic product in 2010, from a 7.2% cap allowed this year, people familiar with the talks said Monday.

9 views

“The deficit drop below 6% of the GDP is subject to a 2.5% decrease of the structural deficit, through limiting expenditures which are not connected to the economic cycles, namely through structural reforms. This includes public layoffs, but the additional letter of intent does not specify any particular figure,” the mentioned sources said.

The authorities in Bucharest are also required to further freeze pensions and salaries in the public system and to increase excises of tobacco and fuels.

Last week, the IMf has agreed to allow Romania a higher budget deficit of 7%-7.2% of GDP, nearly double from the 4.6% cap agreed upon this spring.

The new budget deficit was set following an estimated economic contraction of up to 8.5% in 2009, twice the initial forecast.

An IMF mission has arrived in Bucharest July 28 for a first review of Romania’s progress in meeting the requirements related to a EUR19.95 billion IMF-led aid package.

The IMF is expected to present the review’s results Monday at noon.

If you liked this story, please follow MEDIAFAX.RO on FACEBOOK »

The content of mediafax.ro is for your information only. Republishing or using this content is forbidden without express consent of MEDIAFAX. For this consent, please ask for it by mail at vanzari@mediafax.ro.