The economic stablization will be delayed to the low internal demands, the unfavorable regional context and floods. We are expecting an economic increase of -2% in 2010, nflation will increase temporarily in quarter III and IV due to the VAT increase to 7-8%, the supplementary intent letter signed by the Government on Thursday reads.

The current account deficit is expected to reach 5% of GDP, the document reads.

Other important mentions:

despite economic difficulties, Romania reached the settled budgetary deficit for this half of the year which was determined by the lay off of about 27,000 budgetary personnel and by the control of spending the pack of measures adopted recently sees the increase of VAT to 24%, a 25% cut of budgetary personnel salaries and a decrease of 15% of social benefits and the lay off of 74,000 budgetary personnel at least 15,000 people will be laid off in 2011in 2011 pensions will be frozen and the thirteenth salary will be eliminated the new salary system will be adapted to the labor market conditions a 30% limit for personnel spending will be introduced fiscal reforms

we will continue our efforts to counter fiscal evasion and improve interest rates for loanswe will tax revenues from any source European funds

we already taken measures to accelerate the rate of EU fund absorption we will strenghen the administrative capacity; we will modernize and consolidate the legislative for public investments our main priority wil be to support investments co-financed by European funds, to improve the process of selection; to have new investments we will encourage the participation of the private sector for outsourcing projects or public private partnerships

The economic stablization will be delayed to the low internal demands, the unfavorable regional context and floods. We are expecting