Newly predicted 4% GDP compression reduces the budgetary incomes estimate by lei 20bn
Romania's government is redoing the budget calculations using the new prognosis that shows the economy shrinking by 4 percent and the first results reveal budget revenues decreasing by 20 billion lei versus the level stipulated in the current budget, people from the Cabinet told NewsIn.
The European Commission adopted the estimate made by the International Monetary Fund that pinpoints Romania's economic growth at -4 percent.
Officials mentioned that the government reached an agreement with the fund concerning the budget deficit, which was settled at 4.6 percent of the Gross Domestic Product (GDP).
Consequently, budget revenues could lower from the level currently stipulated in the budget of 193 billion euros or 33.5 percent of the GDP to 173 billion euros. The 2009 budget was built on a 2.5 percent economic growth.
“If these pessimistic predictions turn real, we will have to cut expenses with goods and services, but also investments, while increasing some expenses like social and unemployment aids,” explained people from the Cabinet.
The Labor Ministry Marian Sarbu declared yesterday that the number of unemployed in Romania will hike by 300,000 people the most this year over the past year which would require a 500 million lei surplus to the budget for indemnities and trainings.
The president of the Social Democrat Party (PSD) stated yesterday that the 13 billion euros that the country is to receive from the IMF will be used for stabilizing the exchange rate, while the 5 billion euros allotted by the European Union will go into mending the budget gap and investments. The World Bank, The European Investment Bank and the European Bank for Reconstruction and Development will give together some 2 billion euros.