News 14 Jan 13

Romania Unveils Budget For 2013

Prime Minister says draft budget for this year will put Romania back on the path to economic growth.

Marian Chiriac
Bucharest

Romania’s centre-left government is planning to a growth oriented budget for 2013, with a target growth of 1.8 per cent and a public deficit of under 2 per cent.

“We want to end the circle of last four extremely difficult years by restoring Gross Domestic Product to its 2008 level,” Prime Minister Victor Ponta said, presenting the plan.

GDP is estimated to reach to around 140 billion euro this year, after dropping to 118.3 billion euro in 2009, when the financial crisis started to wreak havoc with the domestic economy, Ponta said. Revenue for 2013 is set at 46 billion euro, 3 billion euro lower than last year.

The government intends to tighten fiscal discipline, eliminate the waste of public funds and act on the principle of social equity.

“As salaries have already been restored to their pre-2009 level, before they were cut, no more pay hikes are expected this year,” Ponta added.

The government has allotted 10.2 billion euro to pay public sector wages and 11.1 billion euro will go on pensions.

The Prime Minister also said Romania is hoping to conclude a new, precautionary-type agreement with the IMF and the EU, when the ongoing one expires in March.

Romania depends on a 20 billion euro rescue package from the IMF, the European Union and the World Bank. It obtained the loan in May 2009 in exchange for agreeing to push through austerity measures aimed at taming the country’s yawning deficit.

An IMF mission is to come this month to Bucharest to hold discussions on the next review of the programme.

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