Romania's deficit beats IMF target, tax revenues up in first half of 2012

Romania's consolidated budget deficit is within the limits set by the International Monetary Fund (IMF) and on track to remain so until the end of the year, according to data from the country's Finance Ministry.

The 1.12 percent of GDP budget deficit for the first half of year equated to RON 6.8 billion (around EUR 1.55 billion), well below the IMF's RON 7 – 8.8 billion (EUR 1.59 – 2 billion) deficit target for the first six months of 2012.

The IMF wants Romania's deficit to be less than 2.2 percent of GDP in cash terms and the latest figure shows that Romania is on track to meet the IMF's target. Last year, the budget deficit at the mid-year point was slightly under 2 percent of GDP.

Tax revenues increased in the first half of the year compared to 2011. Revenues in nominal terms increased by 11.5 percent on 2011, with revenues from VAT up 9.5 percent, excise duties by 6.6 percent and income tax up by 15.5 percent, according to the latest figures from Romania's Ministry of Finance. Expenses were up 3.3 percent in nominal terms but weighted less in the country's GDP. Main increases occurred in EU financed project investments, interests and products and services. Personnel expenses were up by 1.2 percent on the same period of 2011, fueled by the 15 percent increase in public sector wages in February this year, shows Finance Ministry data. Liam Lever, liam@romania-insider.com (photo source: sxc.hu)