The adjustment to the budget will now not be made at the end of this month, nor in early June. It will take place at the end of June after a visit by the IMF is concluded. These latest developments regarding the adjustment of the budget were related by Finance Minister Ionut Popescu.
This all means that the adjustment will be made at the time when calculations for the 2006 budget should normally start.
The precise budget deficit for this year will also be set in mid June during the talks with the Fund. According to Popescu, talks so far with the IMF about this year”s deficit have brought it to within 0.7% and 0.75% of GDP.
He told Mediafax in an interview that he was in favour of a prudent fiscal policy, the primary purpose of which should be to bring inflation down. Current adjustment forecasts indicate 5.8% growth for GDP and an average exchange rate of 37,500 ROL to the euro. When asked to explain his answer in light of the generally perceived strength of the ROL, Popescu answered that any level would have been taken as a signal. On the other hand, he was confident he would be able to convince the IMF that budget revenues would be higher than initially expected by the international institution.
The government is also considering listing stakes in BCR and CEC on the Bucharest Stock Exchange after privatisation is complete.
This idea was already suggested on a number of previous occasions but does not stand much chance of being put into practice any time soon since, says Popescu, the two privatisation processes will not be completed before the end of the first quarter of 2006. More optimistically, however, Prime Minister Calin Popescu-Tariceanu announced that a first instalment of the price for BCR shares could be collected by the end of this year.
These statements should be treated with caution until something happens, one way or the other.
Popescu added that the state could end up retaining no more than 12% in BCR after privatisation, while the stake in CEC that will be put up for sale to a strategic investor will be between 51 and 75%.