Budget falls into deficit after five months: 0.34% of GDP

The general consolidated budget posted a budget deficit of 0.34% of the GDP at the end of May, sources from the Ministry of Economy and Finance told ZF, after the finance minister forecast a deficit at the beginning of the month. At the end of the January-April period, the general budget posted a 1.07 billion-RON surplus and accounted for 0.2% of the GDP. For the overall budget, total revenues went up 48%, to 55.8 billion RON, while spending rose 50.5%, to 54.7 billion RON. Investment-related expenditures saw a significant rise, to 5.7 billion RON four months into the year, more than double against the same time in 2007. Representatives of the Finance Ministry said the rise in investment-related expenditures can be regarded as a signal that points to a linear, balanced use of budget loans, as opposed to last year, when the ministries spent the bulk of funds towards the end of the year. The Government operated the first adjustment in the 2008 budget at the beginning of March and cut back on spending of almost all ministries and thus reduced this year’s deficit from 2.75% of the GDP to 2.3%. The European Commission forecast that the budget deficit would climb to 3.7% of GDP next year, a lot higher than the EU’s acceptable ceiling of 3%, which recommended that Romania should consolidate its public finances by increasing budgetary discipline and by continuing economic reforms.