Budget deficit could narrow to 2.3% of GDP

By this rectification, budgets of most ministries will be reduced by a total €790 million, with Defense, Agriculture and Health subject to the most significant cuts.

The estimated budget deficit for 2007 is 2.63 percent of the GDP. The exact data will be published today by the National Institute of Statistics (INS). For 2008, the deficit was previously estimated at 2.7 percent, but the European Commission (EC) warned Romania on its expenditure level. The maximum deficit admitted by the EC is 3 percent of GDP.

Finance and Economy Minister Varujan Vosganian recently said he sent a rectification draft to the prime minister's office which targets budget spending lower by 0.8 percent of GDP, or €1.1 billion, without lowering the budget for investments.

National Bank (BNR) Governor Mugur Isarescu said that narrowing the budget deficit by cutting consumer spending and maintaining the level of investments would be a correct government decision.