ING expects budget revenues to make up 31.2 percent of GDP, while public spending will represent 38.5 percent of gross domestic product, which would translate to a 7.3 percent deficit.
ING added that the government raised social contributions to increase budget revenues, but regards the government’s goal of attracting European funds worth RON 10.3 billion with pessimism. “We estimate post-accession funds at RON 3 billion. But, considering that Romania succeeded to attract only RON 700 million (€178 mln) in post-accession funds in 2007 and 2008, our forecast is pessimistic,” said Nicolae-Alexandru Chidesciuc, Senior Economist of ING Bank Romania.
Quoted analysts indicated that the government has three options to meet the budget deficit target: the first is a financing agreement with the European Commission and the International Monetary Fund, followed by a cut in salary expenses and/or raising taxes.
