Romania revises 2013 budget raising deficit target to 2.5% of GDP.

By bne IntelliNews October 31, 2013

Romania’s government raised this year’s budget deficit target to 2.5% of economic output from 2.3% under a second revision of the 2013 state budget approved on Oct 30, Mediafax news agency reported citing Prime Minister Victor Ponta .

One of the main reason for the higher budget gap is the need to provide co-funding to EU-financed projects, the finance ministry has earlier said.

Under the second budget revision, estimated revenues were reduced by RON 3.4bn (EUR 768mn) and expenditures by RON 2.2bn. The budget deficit is seen at RON 15.9bn and the GDP at RON 625.6bn.

Ponta has earlier said the budget revision is driven by lower-than-planned revenues. Latest data from the finance ministry showed the nine-month budget revenues rising by 4.4% y/y to RON 147.3bn and expenditures increasing by 4.8% y/y to RON 155.4bn. The budget deficit stood at 1.3% of GDP, up from 1.2% a year ago.

The second budget revision has been agreed with the IMF and the European Commission. An IMF team is currently in Bucharest to make the first review of the funds EUR 2bn stand-by agreement with Romania.

The government made in July the first revision of this year’s budget raising the deficit target to 2.3% from 2.1%.

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