The macroeconomic parameters considered for the second budget correction in this year forecast an economic decline of 8.5 percent and an average exchange rate of RON 4.2/€1, said the State Secretary in the Ministry of Public Finance (MFP) Gheorghe Gherghina, after the International Monetary Fund announced at the end of its assessment mission at the beginning of August that Romania’s economy will shrink by 8-8.5 percent in 2009, compared to 4.1 percent estimated this spring.
The value of Romania’s GDP in 2009 was also revised downward to RON 497.3 billion (€118.4 bln), from RON 531.3 bln after the first budget correction in April. Romania’s GDP amounted to RON 504 bln (€136.8 bln) in 2008.
Following the agreement between the Romanian authorities and the IMF mission at the beginning of August, the budgetary parameters were significantly modified, due to a worsening of the macroeconomic outlook. Thus, IMF officials accepted a budget deficit of 7.3 percent of GDP for 2009 instead of the target set in March, of 4.6 percent of GDP.
