Romania will not reach the budget deficit margin of 4.4 percent set for next year, BNR counselor says

Newsroom 23/09/2010 | 15:02

Romania will not reach next year’s budget deficit margin of 4.4 percent of the GDP because it will not have the estimated economic growth, according to Lucian Croitoru, counselor of Mugur Isarescu, the governor of the National Bank of Romania (BNR).

“2011 will be a very difficult fiscal year, firstly because there will be a cyclical evolution. I do not believe the GDP will be very much modified compared to this year. The growth to 4.4 percent of the GDP is based on economic growth. I don’t think this will take place. We might have a derailment in 2010, because of the fact that the economic decline might be higher than estimated,” he said, quoted by Mediafax newswire.

He explained that this year the budget deficit may undergo a derailment of minus 0.4 percent- 0.5 percent of the GDP.

He also said the necessary adjustment for 2010 and 2011 are based on significant expense cuts.

“The degree of resistance to any kind of adjustment has increased in 2009 and is increasing now. Any adjustment will be submitted for approval by the Romanian people but will be rejected more and more because there is a massive infusion of populism both from politicians and, I am sorry to say, from the media,” Croitoru said.