Romanian President: 2012 Budget Targets Deficit Of 1.9% In Cash Terms

Romanian President Traian Basescu said Thursday, after a meeting with the IMF, World Bank and European Commission delegation, that next year's budget will be built on a deficit of 1.9% of the GDP in cash terms, which can be increased up to 2.5% later in the year.

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Imaginea articolului Romanian President: 2012 Budget Targets Deficit Of 1.9% In Cash Terms

Basescu: 2012 Budget Targets Deficit Of 1.9% In Cash Terms

Basescu said the economic growth forecast remains prudent.

People close to the matter told MEDIAFAX on Wednesday that the Government and IMF discussed a deficit target of 1.9-2.1% (in cash terms) for next year, which may be increased to 2.5% in the second half if state-owned enterprises are restructured, so that the final deficit including these companies' losses would be no higher than 3% of the GDP.

The current deficit target for 2012 is 3% according to ESA 95 (which includes the losses of state-owned enterprises) and a cash deficit of 1.9% is equivalent to 2.3-2.4% of the GDP, according to ESA.

The Government has committed to reducing the budget deficit to below 3% next year, including the losses of certain state-owned companies. This is also a condition for the termination of the European Commission's excessive deficit procedure, opened against Romania in 2009.

This year, the deficit must not exceed 4.4% of the GDP.

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