President Traian Basescu: Budget deficit reached 5% in 2008

Romanian president Traian Basescu announced on Thursday that the budget deficit in 2008 was 5% of the gross domestic product. Official estimated until recently that the deficit would be at maximum 4%.

„The state budget is not infinite. Some believed it is, that the economy is booming and, in the end, we had a 5% deficit”, said Basescu while meeting the members of the Superior Council of Magistrates.

Former Economy Minister Varujan Vosganian estimated a 3.5% deficit, up to a maximum of 4%, in case the income is very poor in December. The income was lower even than the most pessimistic expectations.

Analysts explain that such a thing is possible only if the state spent 12.3 billion RON than is had as entries in the past two months of the year, the amount representing Moldova’s national budget for one year. The solution they see is the emission of two-year bonds for the populace and companies.

The deficit target for 2008 was 2.3%. In 2009, the expected deficit is between 1.7 and 2% of the GDP, with an economic growth of 3.5%.