Romania makes progress towards 7.3 percent budget deficit, EU, IMF say

Romania has made progress in reaching the target concerning the budgetary deficit of 7.3 percent from the gross domestic product (GDP) in 2009. Still, a strict control of the expenses is essential, according to a mission of the European Union (EU) and the International Monetary Fund (IMF). Thus, a joint team of the EU and IMF made a visit in Bucharest, between December 14-16, to continue discussions regarding budgetary policy.

As far as 2010 is concerned, the mission and the authorities agreed on a number of measures of fiscal consolidation that equal 2.5 percent of the GDP which focus on budget expenses.

Since the macro-economic forecast in 2010 is better than initially estimated, the mission considered these measures seem to be sufficient to reach the deficit target of 5.9 percent that is stipulated in the program. The new government is encouraged, upon taking function, to approve the budget project and send it to parliament for approval. Also, the government must continue progress in structural reform regarding the law of fiscal responsibility and the reform of the pensions.

On condition that these evolutions are confirmed, the European Commission hopes to finish the evaluation by the end of January 2010, which would allow the grant of the EUR 1 billion loan.

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