IMF Has ‘No Doubts’ On Romania 2010 Deficit Data - Official

04.27.2011 By Florentina Dragu

The International Monetary Fund has “no doubts whatsoever” on the quality of the budgetary data sent by Romania for 2010, the country’s representative to the IMF said Wednesday.

The International Monetary Fund has "no doubts whatsoever" on the quality of the budgetary data sent by Romania for 2010, the country's representative to the IMF said Wednesday.

"The data has been verified and it is accurate; it was computed in accordance with the terms of the consolidated budget deficit as defined together with the IMF and the European Commission, prior to the decision to include some public companies into the general consolidated budget," Mihai Tanasescu told RFI in an interview.

On Tuesday, the European Union's statistics office Eurostat said it was reserved on the quality of budget data reported by Romania for 2010, citing uncertainties on the impact of some public corporations on the government deficit and on the reporting of ESA95 categories "other accounts receivable and payable."

The European Union is rethinking the concept of the consolidated budget deficit to include the deficits reported by those public corporations which receive subsidies and report losses, Tanasescu said.

"In Romania's case, we are talking about two companies, namely CFR Infrastructura and Termoelectrica, which will be included in the general consolidated budget starting with this year. Therefore, in EU's opinion, the deficits for the last four years must be revised," he added.

Romania's statistics institute announced the authorities in Bucharest would verify the financial data of a series of public companies for the 2007-2009 period to identify potential discrepancies between their financial and non-financial accounts.

The revised data will be sent to Eurostat in time for the final 2010 government deficit and debt report due for release in September.

According to Finance Ministry officials, the deficits of CFR Infrastructura and of Termoelectrica could widen the country's budget gap to 6.8%-6.9% of the gross domestic product in 2010, compared to 6.4% initially reported.

However, the budget deficit will remain below the 7.3% of GDP target agreed with the European Commission.

For 2011, the ministry estimates the two companies will have a negative impact on the consolidated budget of 0.1% of GDP, bringing the budget deficit to 4.6% of GDP.

Last year, the EU has revised up by 0.3 percentage points its estimations on Romania's government deficit in 2008 and 2009, following a reclassification of state-owned companies inside the budget sector.