Where will budget revenues come from in 2009?

Forecasts by the International Monetary Fund (IMF) and the Ministry of Finance regarding the evolution of main macroeconomic indicators at the center of talks yesterday, in the first day of an analysis of Romania's macroeconomic situation, have been very similar. While the IMF expects a 2.3 percent economic growth rate in Romania, the Ministry of Finance estimates 2.5 percent, according to sources close to the discussions.

These macroeconomic indicators include revenues (32.1 percent), expenses (34.1 percent), budget deficit (2 percent of gross domestic product), economic increase (2.5 percent of GDP), inflation (5 percent), unemployment (5.5 percent), and the exchange rate (RON 4/€1).

"The Fund's main concern is how the government will meet these targets. Major question marks focus on maintaining the budget deficit below two percent of GDP and obtaining revenues of 32.1 percent of GDP," quoted sources told Business Standard.

These same sources indicated that the European Commission (EC) and the IMF recently signed a collaboration agreement to offer loans to countries which need external financing to exit the crisis. President Traian Basescu said Tuesday that Romania has already notified the EC that it intends to take out a €6-7 billion loan, under IMF supervision.

According to the analysis, a 32.1 percent share of GDP in revenues will be a Real challenge for the government headed by Prime Minister Emil Boc. This portion is too optimistic considering current crisis conditions, when company profits will plunge or even disappear.

Business Standard