The increase in budget spending and the continued revenue decline have deepened the budget deficit by a further one billion euros in May, to 3.1% of GDP, so it remains to be seen whether the mid-year target negotiated with the IMF will be met or not.
The budget progression of the last few months is not sending very optimistic signals, with the Finance Ministry still uncertain as to whether the target agreed with the IMF for the first six months, of 18.2 billion RON, will be met.
The budget deficit has already reached 16.6 billion RON after five months, with the rise in the region of 4 billion RON per month. It remains to be seen how things stood as far as budget collections and spending are concerned in June and whether things will remain the same as in the first quarter of the year when the authorities managed to meet the deficit target negotiated with the Fund by postponing spending to the private sector and by sacrificing investments.
From a 1.5% of GDP deficit at the end of the first quarter, it doubled in two months' time. The first five months deficit was calculated based on the GDP in the 2010 budget law, of 538.9 billion RON. Considering the new GDP, revised downward to 510.4 billion RON, the budget deficit amounted to 3.27% of GDP at the end of May.
The increase in budget spending and the continued revenue decline have deepened the budget deficit by a further one billion euros in May, to 3.1% of GDP, so it remains to be seen whether the mid-year target negotiated with the IMF will be met or not.
The budget progression of the last few months is not sending very optimistic signals, with the Finance Ministry still uncertain as to whether the target agreed with the IMF for the first six months, of 18.2 billion RON, will be met.
The budget deficit has already reached 16.6 billion RON after five months, with the rise in the regio
