Romania's Fin Min: '08 Budget Def To Be Between 3% And 4% Of GDP

Romania's consolidated budget deficit will be at the end of the year between 3% and 4% of the gross domestic product, or GDP, the country's Finance Minister Varujan Vosganian said Wednesday.

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If budget receipts will be in December higher than in the previous month, the budget deficit may be between 3% and 3.5% of the GDP, Vosganian also said.

The Finance Minister said that in October and November the budget revenues dropped by a percentage point of the GDP, compared with the ministry's forecast, due to the international financial crisis.

Besides the financial deadlock caused by the banking system liquidity shortage, budget receipts also decreased due to several large industrial producers activity ceases, Vosganian also said.

He added the budget deficit might have reached the 2.3% of the GDP target, without the large decline in revenues.

Romania's consolidated budget deficit widened after the first ten months to 1.61% of the gross domestic product, or GDP, Finance Ministry data showed last Wednesday.

But Vosganian said recently the country’s budget deficit widened to 2.9% of the GDP after the first 11 months, due to a slump in budget revenues in the last two months, following the international crisis. He said the budget revenues in October and November were EUR1.3 billion below the projected level.

The European Commission forecasts Romania's budget deficit at 3.5% of the GDP in 2008 and at 4% of the GDP in 2009.

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