The Finance Ministry has so managed to keep the budgetarydeficit under control, with the gap widening by almost onepercentage point to around 6% in GDP (30bn RON) in November,according to Finance Minister Gheorghe Pogea. However, there is therisk that the state has not honoured its expenses to the privatesector, as some companies have charged in the past months.
Under the circumstances, the budgetary deficit target of 7.3% inGDP agreed on with the IMF for this year seems attainable, despitethe downbeat estimates of analysts and financial institutions inrecent months, which pointed to a level closer to 8% of GDP.
Gheorghe Gherghina, a secretary of state with the FinanceMinistry in charge with the budgetary policy, explained thatnormally December would not be different from November so that the7.3% target should be hit. "Should budgetary revenues match theNovember level and expenses be 3bn RON higher, we'd still reach the7.3% target," Gherghina said.
This November, budgetary revenues reached 12.1bn RON, above thelevel posted in the same month of last year, while expenditurescame to 16.3bn RON.
The November development points to a reversal of the budgetaryrevenues collection trend in the context where budgetary revenuestotalled 15.3bn RON (3.64bn euros) in October, below the level ofOctober 2008, of 16.7bn RON (3.97bn euros).
Beyond the high budgetary deficit, the main problem is theearmarking of some very high sums for social expenses and wages,accounting for around two thirds in total public expenses, and thedynamics of these expenses.
Given the high level of the budgetary deficit, the urgentproblem is the difficulty to finance it. In the first half of thisyear, the Finance Ministry put pressure on the domestic market,borrowing aggressively in July for periods of just a few days.
The prolonged political instability has delayed the approval ofthe 2010 budget and structural reforms.
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