Romania stays within agreed budget deficit for first quarter

Romania stayed within the budget deficit target agreed with the International Monetary Fund for the first quarter of the year, according to Bogdan Dragoi, state secretary within the Finance Ministry. The country's budget dropped by 1.6 percent in the first five months of the year, to approximately EUR 14.7 billion. Its VAT revenues dropped by 7.8 percent, the revenue tax, by 6.4 percent, the profit tax was down 2.7 percent and the social insurance contribution revenues, by 4.4 percent. This has lead to a budget deficit of EUR 3.9 billion, which is 3.1 percent of the GDP. The Romanian Government has pledged to run with a 6.8 percent budget deficit for this year, after cutting state clerk salaries by 25 percent and increasing the VAT from 19 to 24 percent. Romania will receive most likely on Wednesday, July 8th, the fifth loan disbursement from the IMF, some EUR 913 million.