PM Boc warned that, if the country is not covered by an international agreement, it will have to borrow on the international market ‘at very big costs’.
At his Friday meeting with the prefects at the Ministry of Administration and Interior, Prime-Minister Emil Boc said Romania would need EUR 5.7 bln to finance its deficit in 2011 and warned that, if the country is not in an international agreement, it will have to borrow money from the international market ‘at very big costs’. According to the PM quoted by Agerpres, the state budget as it was approved in Parliament contained the guarantee of recession ending and of a resumption of economic growth in 2011. If we stay in the international agreements, the money will be secured and we will be able to consolidate the good things that we have started’, the PM explained. He said the 2011 investment budget was growing from RON 33 bln to RON 35 bln, with a narrowing budget deficit. ‘In essence, this means true reform’, he mentioned. According to Boc, next year the inflation rate will be of 5.3 per cent compared to 6.9 per cent this yea’, the unemployment rate will also drop from an average 7.5 per cent this year to 6.9 per cent in 2011, and the gross income from salaries will grow from RON 1,910 to RON 2,222.
budget deficit up to 5.2 pc of gdp after 11 months
The general consolidated budget deficit was 5.2 per cent of GDP in the first 11 months of the year, according to Finance Ministry Secretary of State Gheorghe Gherghina, who nonetheless did not give any more information on revenue and expenditure that had been up from 4.63 per cent reported at the end of October, according to Mediafax. The deficit after the first ten months was RON 23.7 bln, higher by RON 400 M compared to the previous month, meaning that, in relation to the GDP, the gap increased slightly from 4.56 per cent in September to 4.63 per cent in October. This year, the government made a commitment to keep the budget deficit to less than 6.8 per cent of GDP and to reduce it to 4.4 per cent of GDP next year. The Minister of Public Finance, Gheorghe Ialomitianu, on Saturday noted that Romania would definitely meet this year’s budget deficit target. The GDP is estimated at RON 511.58 bn by the end of this year. ‘We had a peak of revenue collection at the end of the quarter, which explains the bigger revenue in October compared to November. In November we didn’t collect those donations from three companies which usually happens in December’, Ialomitianu said, according to Realitatea.net. Asked if there might be a risk for the budget deficit to ‘jump’ beyond the 2010 target in the last month of the year, the minister answered ‘some restrictions’ had been instituted on expenditures by Ordinance no. 63.
BANCPOST: ROMANIA OUT OF RECESSION IN MID-2011
Romania will not come out of recession in Q4 of 2010 either, according to information supplied by Bancpost analysts. ‘October figures do not justify the idea that we will be coming out of recession in Q4/2010. The 2011 forecast shows that the recession will end in the middle of the year’, said Bancpost Chief-Economist Dan Bucsa, according to Evenimentul zilei daily. He thinks Romania’s economic re-launch cannot be based only on investment and export. ‘I believe a good combination would be consumption and export’, he also said, noting that the European economy is doing better than Europeans allow themselves to believe. ‘Going back to consumption, it has better chances of recovery with credit than without’, Bancpost President Mihai Bogza in turn said.