Moldova's Parliament Adopts 2010 Budget Bill Targeting 1.5% GDP Growth, 4.1 Bln Lei (234 Mln Euro) Deficit

Figures for the deficit-to-GDP ratio were unavailable.

The 2010 budget targets 1.5% economic growth next year, compared to a 9.0% contraction projected for 2009. End-year inflation will speed up to 5.0% next year from 0.5% forecast for the current year.

The budget was adopted with the votes of the pro-West government coalition in parliament. The coalition comprises the Democratic Party, the Liberal Party, the Liberal Democratic Party and Our Moldova Alliance and controls 53 seats in the chamber.

The Communist Party, which controls 44 of the 101 seats in parliament, boycotted the vote, saying that their objections to the budget bill were not taken into consideration, Moldpres (www.moldpres.md) reported. It did not say how the four independent members of parliament had voted.

Budget revenue was approved at 15.3 billion lei in 2010, up from 13.1 billion lei projected for this year. Spending is budgeted at 19.4 billion lei, up from 17.75 billion lei forecast for 2009.

The budget deficit next year will be financed with sales of Treasury bills, privatisation proceeds and external financing, the Finance Ministry said earlier.

Proceeds from the sale of state-owned assets are expected to reach 350 million lei in 2010, up from the 100 million lei in privatisation revenue planned for the current year. Two hundred million lei will come from Treasury bills auctions and a further 3.06 billion lei will come from external financing in 2010.

Some 917.2 million lei in budget spending would be allocated for payments on Moldova's foreign debt next year, up from 776.9 million lei planned for the current year, the ministry said.

Moldova's budget deficit reached 2.052 billion lei in the first ten months of 2009, the latest data from the Finance Ministry showed.

In November, the country’s government raised the budget gap forecast for this year to 4.65 billion lei from 573.8 million lei and reversed its previous forecast of a real 6.0% economic growth to a 9.0% drop. It also lowered its end-year inflation forecast to 0.5% from 9.5% projected earlier.

Moldova’s economy contracted by a real 7.7% in the first nine months of 2009. Moldova's consumer prices rose by 1.0% month-on-month in November, after rising by 1.5% in October. Year-on-year, Moldova reported deflation of 0.7% in November after deflation of 1.6% in October.

(1 euro=16.7314 Moldovan lei)