25 Martie 2009
IMF and local authorities agree on a projected budget deficit of 4.6%
Romania's government bargained with officials of the International Monetary Fund (IMF) for a budget gap of 4.6 percent of the Gross Domestic Product (GDP) in 2009, as the economy will shrink by 4 percent, NewsIn informs.
In December 2008, the odds were that the country's economy would grow by about 2 percent and the government correspondingly counted upon a budget gap of 2 percent of the GDP. The economic situation has since then deteriorated and now budgetary incomes are decreasing faster than expenses.
“Quite surprisingly, the budget gap settled upon is 4.6 percent. For the first time, the government will have to aim at a higher gap than initially desired,” said Croitoru.
At the same time, the adjustment of the current account deficit by 4.5 percentage points to 8 percent of the GDP this year will be accomplished through a correction from the private sector, explained the central bank advisor.
He believes the public sector is in a great need for financing as banks are unwilling to extend crediting and as the cost of capital is high.
“Quite surprisingly, the budget gap settled upon is 4.6 percent. For the first time, the government will have to aim at a higher gap than initially desired,” said Croitoru.
At the same time, the adjustment of the current account deficit by 4.5 percentage points to 8 percent of the GDP this year will be accomplished through a correction from the private sector, explained the central bank advisor.
He believes the public sector is in a great need for financing as banks are unwilling to extend crediting and as the cost of capital is high.