Termoelectrica, CFR Losses May Widen Romania's 2010 Budget Gap To 6.9% Of GDP

04.27.2011 By Florentina Dragu

Romania’s budget deficit for 2010 will be recalculated to include the financial results of money-losing companies Termoelectrica and CFR Infrastructura, state secretary Gheorghe Gherghina said Tuesday.

Romania's budget deficit for 2010 will be recalculated to include the financial results of money-losing companies Termoelectrica and CFR Infrastructura, state secretary Gheorghe Gherghina said Tuesday.

The losses of the two companies could widen the budget gap to 6.8%-6.9% of the gross domestic product in 2010, compared to 6.4% initially reported, Gherghina said.

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

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.

The 2011 budget gap target agreed with the Commission is of 5% of GDP, calculated under ESA95 standards.

Earlier Tuesday, the European Union's statistics office Eurostat said 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."

According to Romanian statistics institute, the finance ministry will 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 data due for release in September.

Last year, the European Commission 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.