2012 Targets: 2.2% Economic Growth And Budget Deficit Of 1.9%/GDP

11.04.2011 By Claudia Medrega

Next year’s economic growth forecast could be set at 2.2% and the budget deficit target at 1.9% of GDP using the Romanian methodology of accounting (cash), according to sources close to the talks held between the Government and the IMF.

"The talks on the economic growth forecast fluctuated between 2% and 2.4%, but the most likely figure is 2.2%. As for the budget deficit, the fluctuation interval considered was 1.7% to 2.1% of GDP and the target could be set at 1.9% of GDP using the cash method," mentioned the quoted sources.

The percentages are close to those "announced" at the end of last week by president Traian Basescu, who was set to have another meeting with IMF officials on Thursday evening, after they had already paid him a visit at the Cotroceni Palace.

A few days are left until the end of the IMF and European Commission review mission, when final, "official" figures will emerge, on which the Government will base its budget.

The drawing up of a cautious budget for 2012, with as tight a deficit as possible in order to diminish the financing need is very important in helping Romania avoid being affected by the lingering international tensions, and this is acknowledged by Romanian officials.

Amid a reduced economic growth forecast for next year, from 3.5% towards 2%, around 0.8% to 1% of GDP would be added to the budget deficit, according to analyst estimates.

But the problem is that the budget deficit should be adjusted next year to 3% of GDP or even less, which compares with 4.4% of GDP this year.

(English version by Daniela Stoican)