IMF: Romania must hold its budget deficit below 14.5 bln lei by the end of June

International Monetary Fund urged Romania in a memorandum attached to the letter sent to Romanian authorities, to keep the budget deficit under 14.5 bln lei at the end of first half of 2009, namely 2.73% of GDP.

Sources in the Government said the International Monetary Fund had attached a memorandum to the letter sent yesterday which includes technical details, such as to meet the quarterly limits on budget deficit.

“In the event of a failure of the state to meet quarterly limits on budget deficit set at 14.5 bln euros, experts from International Monetary Fund and European Commission may request the Government to proceed with another revision of the budget, with the occasion of a first review of conditions attached to the external loan scheduled for July”, officials said.

On Wednesday, the state secretary of the Ministry of Finance, Gheorghe Gherghina, said that experts from IMF and EC are expected to arrive in Romania on July 10 for an assessment of Romanian economy, and if the revenues are short of projections, a new budget revision will be made in third quarter.

“If the annual state revenues will prove to be short of expectations, it will be made an additional letter together with the representatives of European Commission and International Monetary Fund, when it is very likely to resort to new measures to meet the budget deficit projected at 4.6% of GDP. If we fail to meet the state revenues goal, they will urge for new actions to increase revenues or to cut spending”, said Gherghina.

Romanian authorities have received the letter from IMF on Wednesday night. Prime Minister Emil Boc has immediately called for extraordinary Government session on Thursday at 2:00 pm to tackle the IMF/EC loan issue.

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