CHISINAU (Moldova), November 18 (SeeNews) – Moldova's government raised on Wednesday the budget gap forecast for this year to 4.65 billion lei ($419.8 million/281.2 million euro) from 573.8 million lei and reversed its previous forecast of a real 6.0% economic growth to a 9.0% drop, a government official said.
Under amendments to the 2009 budget bill the government also lowered its end-year inflation forecast to 0.5% from 9.5% projected earlier, a government press officer told SeeNews. The amendments will now go before parliament for approval.
The main reasons for the expected economic contraction are the projected fall in investmet in fixed assets by 40% and the decline in industry, agriculture and foreign trade, the Finance Ministry said in a note accompanying the proposed amendments.
Inflation will be lower mainly due to a fall in the prices of food and a number of imported goods, it added.
Budget revenue will total 13.1 billion lei, 26% lower than previously projected. Budget spending was cut by 3.1% to 17.75 billion lei.
The ministry added that allocations for foreign debt payments in the current year were raised to 776.9 million lei from 684.4 million lei approved earlier.
Moldova's budget deficit reached 1.963 billion lei in the first nine months of 2009, the latest data from the Finance Ministry showed.
Moldova’s economy contracted by a real 7.8% in the first half of 2009. The country swung to a 1.5% monthly inflation in October after a 0.6% monthly deflation in September. Year-on-year, the country's consumer price index (CPI) was down 1.6% in October compared to a 2.3% fall in September.
(1 euro=16.5336 Moldovan lei)