Government approves budget revision, forecasts a 1.9 economic contraction

Newsroom 19/08/2010 | 10:10

The government approved yesterday the first budget revision for 2010, which includes fund increases for socially protected categories and budget cuts for several ministries. Finance Minister Sebastian Vladescu said that the revision is based on an estimated 1.7 – 1.9 percent economic contraction, an exchange rate of 4.24 RON/EUR and a 5.9 percent average annual inflation rate.

“Through this budget revision we have prioritized public investments in Romania. Each ministry was asked to fund mainly those investment projects that need to be finalized in 2010 and only secondly projects which are due to be finalized in the following years, especially in 2011”, said Prime Minister Emil Boc. He added that the budget revision is in line with the 6.8 percent budget deficit agreed upon with the International Monetary Fund (IMF).

Investments are to be reduced by 0.2 percent this year, but Vladescu said this will be a consequence of reduced acquisition costs, while the ministries’ budgets for co-financed European projects will not be affected. Additional funds are to be allocated to the pension fund (RON 3.8 billion), the Ministry of Health (RON 2.9 billion) and the Ministry of Environment (RON 241 million) among others.