Romania to widen 2014 budget deficit target on higher military spending

By bne IntelliNews April 29, 2014

Romania will widen the budget deficit target by 0.2% of GDP* [to 2.4% of GDP] this year to boost its military spending, PM Victor Ponta said as quoted by HotNews online news services.

Rising the defence spending is in line with the calendar agreed with NATO aimed at bringing it to 2% of GDP in 2017, he explained. Romania’s “financial partners” (meaning the IMF and the EU) have already agreed to the budget deficit widening, Ponta confirmed. The defence budget hike would be part of the June budget adjustment, he explained.

The supplementary spending was announced just after President Traian Basescu warned that Romania ought to take such steps in the context of regional developments. Romania cut its defence spending during the recession years from above 2% of GDP before the crisis, even if the country has to observe a 2.13% target as a NATO member, Ziarul Financiar daily commented.

PM Ponta mentioned that the money would be used for the military capacity enhancement by acquisitions mainly from local producers. Aircraft producers and repair companies Aerostar Bacau and IAR Brasov were reportedly informed earlier this month about the imminent rise in the volume of public orders, Ziarul Financiar daily reported.

Romania currently targets 2.2% of GDP budget deficit this year, down from 2.5% of GDP in 2012-2013, under the national (cash based) methodology. Under the ESA 95 methodology, Romania’s budget deficit narrowed to 2.3% of GDP in 2013 from 3% in 2012 and it will further decrease to 2% of GDP this year.

* PM Ponta mentioned both 0.2% of GDP and RON 700mn – even if RON 700mn accounts only for some 0.1% of this year’s GDP.

Related Articles

Almaty cost of living lowest among major cities

Kazakhstan’s largest city and business centre Almaty has dropped to last place on the Economist Intelligence Unit’s bi-annual ranking of the ... more

Bucharest urges local government to borrow from banks despite warnings from IMF and EC

Romania’s local administration can co-finance the EU-funded projects from bank loans at interest rates lower than the financing cost of the Treasury, Romania’s central government reportedly ... more

IPO of Romanian telco RCS&RDS reportedly planned for May

A group of shareholders of Romanian diversified telecoms group RCS&RDS want to sell 20%-30% of the group’s shares in an IPO, Ziarul Financiar daily reported. The IPO is expected to take place ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss