Government to approve budgetary modifications / Romania's GDP to drop by 8-8.5%

The government approved on Saturday the planned budgetary modifications, Romanian Finance ministry Gheorghe Pogea announced. As a direct consequence, Romania’s GDP might drop by 8 to 8.5% late this year, Pogea said. The deficit will register, by the end of the year 7.3% of GDP, compared to 4.6%, as initially estimated. The inflation target is 4.3%.

Here are some of the most important declarations:

the budgetary modification amounts to 5.25 billion lei

VAT revenue dropped by 4 billion lei due to a drop of economic activities
the state will insure necessary financial resources for pensions
we decided to allocate another 900 million lei for infrastructure works
Consolidated budget revenues dropped this year by 17.4 billion lei (representing 3.5% of GDP) compared to initial estimates
after the modifications, revenues amount to 31.6% of GDP and spending to 38.9% of GDP

Ministries will have to cut spending according to the following list: