Raiffeisen analysts not convinced by Vosganian's budget

The revenues budgeted for 2008 are overestimated, and could cause the risk of a higher than expected budget deficit, Raiffeisen’s research department analysts believe. “The revenues of the 2008 budget are clearly overestimated. Under the circumstances, the budget deficit could leap beyond 3% of GDP, and because 2008 is an electoral year, the expense plan stands a high chance of being accomplished,” Raiffeisen Bank analysts explain. The revenues of the public budget amounted to just 31.2% of GDP in 2006, which makes it virtually impossible to attain a target of 36.9% of GDP as revenue this year and of 39.3% of GDP in 2008, analysts believe, commenting on the budget draft. For instance, the budgetary collection in the first eight months was only 0.8% higher against the same time last year, the bank officials explain. The 2008 budget draft relies on 54.8 billion euros (39.6% of GDP) as revenues, 58.6 billion euros (42.3% of GDP) in expenses and a deficit of 3.8 billion euros (2.7% of GDP). The document was enacted by the Government and will be put before Parliament for debate. One example of estimates deemed as unrealistic is the increase in the collection of social security contributions (CAS) in 2008. The budget draft estimates an increase of their share of the GDP by 1.5% against 2007, although the CAS will be cut by 8% in four stages next year.