Parliament observes EU pledges and IMF negotiations

The state budget for next year observes Romania’s commitments to the EU and includes the outcome of negotiations with the International Monetary Fund and the World Bank that led to the recent agreements, Premier Adrian Nastase on Monday told parliament debates on 2002 budget Law.

According to Nastase, due to a “special effort,” this was the first time the budget Law was sent to Parliament in due time, meaning that the budget will be endorsed before the financial year begins, which will make the economic and financial actions more predictable.

The state budget aims to consolidate the national economy and to secure durable development and observes the principles and guidelines of a functional market economy.

Adrian Nastase presented the main budget indicators for 2002, mentioning 5% GDP growth, 5.8% industrial output increase, 4.5% agricultural output increase and current account deficit of 5.5% of GDP.

The budget policy will observe three guidelines: budget expenses depending on certain revenues, budget expenses depending on priorities, allowing the introduction of the programme budget and higher financial autonomy for local public authorities.

The budget is built on a “major constraint,” namely the 3% of GDP budget deficit, which has been agreed by the IMF. Budget revenues are expected to fall from 32.7% of GDP in 2001 to 31.8% of GDP in 2002, while expenditures are estimated to decrease from 36.2% to 34.8%.

The Premier explained that the budget revenue decrease was triggered by the lower contribution of taxes to the budget, from 30.5% to 30% of GDP, so that companies should have higher financial resources.