Public deficit - Spending, the drought widened last year’s deficit in Romania to 2.4% of the GDP

Budget revenues totaled 136.8 billion lei while expenditures rose to 146.8 billion lei, Minister of Economy and Finance Varujan Vosganian said.

Local administration offices spent as much as 7.1 billion euros in December 2007, Vosganian emphasized. The minister noted in the last three months of 2007 local administration offices broke the wallet open and spent 50 percent of the funds allotted for the entire year.

Vosganian explained some custom taxes and the Value Added Tax (VAT) created a deficit of 0.5 percent of the GDP because fiscal authorities are still collecting. The minister noted the increase in pensions attracted spending of 300 million euros and the subsidies granted to fight the effects of the drought added another 600 million euros. This resulted in a deficit of 0.5 percent of the GDP.

If calculated using the EU accounting standards, the public deficit represents 2.6-2.7 percent of the GDP. Revenues stand at 35 percent of the GDP while expenditures hit 37.6 percent.

Vosganian last year said the institution he runs succeeded in managing better the expenditures for November and December 2007. The minister initially estimated a 1.4 percent of the GDP budgetary deficit.

Source: NewsIn