Romania Turns to Cons Budget Deficit of 1.61%/GDP in Jan-Oct

The ten-month budget gap widened from 1.42% of GDP through September.

Consolidated budget revenue totalled 135.9 billion lei in the first 10 months of 2008 and spending reached almost 144.02 billion lei, the Finance and Economy Ministry said in a report posted on its website.

Romania's government plans to end 2008 with a budget deficit equivalent to 2.3% of projected GDP. The target is below the 3.0% figure set under EU's Maastricht criteria, which Romania must meet to qualify for the adoption of the euro.

Romania, which joined the European Union last year, must meet the Maastricht criteria on inflation, public debt, budget deficit, currency stability and interest rates to qualify for the adoption of the euro. However, the European Commission said last month it has projected a budget gap of 3.5% of GDP for Romania due to its loose fiscal policy.

Analysts have said Romania's economy faces the risk of a hard landing next year with external financing shrinking as a result of the global credit crunch. The persistently loose fiscal policy of the outgoing Liberal-led government has raised fears of the budget gap widening beyond the Maastricht criteria and taxes being raised to make up for dwindling budget revenue.

The government targets budget revenue of 47 billion euro ($61.1 billion) for 2008, or around 36.5% of GDP.

($ = 0.7696 euro)