Executive cuts 2009 budget revenues and expenditure

The Government approved amendments to the budget law for 2009, decreasing the [revenues] from 17.7 billion lei to [11.1 billion] lei, while the [expenditure] – from 18.3 billion lei to [15.1 billion], Info-Prim Neo reports. Minister of Finance Veaceslav Negruta said that when the budget was formulated, the revenues were exaggerated and there is no other way out than cutting them by about 21%. The expenditure was also reduced as it was based on overblown revenues. During the last months of 2008 and in the first half of this year, there were adopted a number of laws and decisions that were electoral in character. The [budget deficit will be 4.6 billion lei] or 9% of the GDP. It will be financed from internal resources by issuing state securities, from the over 180 million lei in Special Drawing Rights allocated by the IMF and from the US$150 million loan negotiated with Russia, the minister said. “If the negotiations end without results, we might borrow money from foreign organizations that promised help,” Negruta said. The minister also said that the spending planned for salaries, pensions, health programs and other social purposes has not been reduced. By this yearend, the economic entities will be refunded VAT in the amount of over 1 billion lei. This debt was inherited from the previous government. There will be paid overdue agricultural subsidies of about 54 million lei. The agriculture subsidization fund will be raised from 313 million lei to 563 million lei. Veaceslav Negruta said the [state debt] on December 31 will be [16.6 billion lei], up 5 billion lei from December 31, 2008. It will make up 27.9% of the GDP, as against 18.5% the previous year. The foreign debt will constitute 69.2% of the GDP, while the internal one – 30.8%. The [internal state debt] on December 31 will be [5.1 billion lei] or 5.9% of the GDP, up 0.3%. The foreign debt will constitute 19.3% of the GDP, up 6.4% from the end of 2008. The payments for servicing the foreign debt in 2009 will make up 2.3% of the GDP.