Romania’s 11-Mo Budget Def At 2.9% of GDP, On Drop In Revs - Fin Min

Romania’s budget deficit widened to 2.9% of the gross domestic product, or GDP, after the first 11 months, due to a slump in budget revenues in the last two months, following the international crisis, the country’s Finance Minister Varujan Vosganian told MEDIAFAX on Thursday.

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Vosganian said the budget revenues in October and November are EUR1.3 billion below the projected level.

“In the last two months, the economic situation worsened, as regards both the companies’ turnover and the bankruptcy rate. The companies (…) are facing liquidity problems,” Vosganian said.

The ministry has already talked with Romania’s Prime Minister Calin Popescu Tariceanu a harsh program for December, so that the annual budget deficit is kept at 3%. “We try to avoid passing this limit with more than 0.1-0.2 percentage points,” Vosganian said.

Vosganian added that he asked, in the first half of the year, for a reduction in the 2008 budget deficit target, to 2.3% of the GDP, because he had seen an impact of the international financial turmoil in the last months of the year.

Until the end of this week, the Finance Ministry will bring in an evaluation of December’s public expenditure to the Government, in order to analyze what expenses can be cut.

After the first ten months, Romania’s general consolidated budget deficit stood at 1.5% of the GDP.

In November, the European Commission forecasted that Romania’s budget deficit will exceed the 3% Maastricht limit this year and reach 3.5% of the GDP in 2008, and will further widen to 4% in 2009.

Last week, Romania’s Government has approved this year’s fourth budget revision, maintaining the budget deficit limit at 2.3% of the GDP.

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