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Sep 11, 2007 17:57 EEST
(adds quotes, details)</p>BUCHAREST
September 11 (SeeNews) - Romania will keep unchanged its 2007 budget deficit target of 2.8% of the gross domestic product (GDP) despite registering budget surplus for each of the last few months, Economy and Finance Minister Varujan Vosganian said on Tuesday.
"We maintain the budget deficit [target] at 2.8% [of GDP] and we are asked why do we do that if so far we have a surplus. We maintain it because we don't want to deprive any ministry from the opportunity to spend its money", Vosganian told a news conference presenting a government budget revision targeting the allocation of more funds to certain ministries to cover additional expenditures.
The EU newcomer's government is pursuing a prudent budgetary policy in order to be able to counter the negative effects from foreign markets and is keeping reserves for "any obligations that may arise by the end of the year", Vosganian said, but did not elaborate.
Bucharest-based brokers say that foreign investors, who account for more than 80% of the investors operating on the Bucharest SStock Exchange, have been standing aside because of the recent problems in the U.S. sub-prime mortgage market and are waiting for September 18 when the Federal Reserve will discuss its key reference rate.
Within the revision the labour ministry was allocated an additional 1.4 billion lei ($583.7 million/422.26 million euro), a further 200 million lei went to the transport ministry and 86 million lei to CFR Calatori, the passenger arm of state-owned railways company CFR, Vosganian said.
Some 200 million lei were allocated to the Ministry of Interior and Administrative Reform, part of which will be spent on securing fuel stocks for local administrations for the coming winter, he added.
"From where does this money come? It comes mostly from increased budget revenues," Vosganian said, adding that local administrations alone had posted a surplus in their budgets equivalent almost to 1.0% of the projected GDP.
Romania had a consolidated budget surplus of 0.3% of the GDP in the first eight months of the year, Vosganian said last week. For the first seven months of 2007 Romania had a consolidated budget surplus equivalent to 0.5% of the projected GDP.
The country had a consolidated budget gap of 1.7% of GDP last year, below the government's target of 2.5% shortfall.
Romania joined the European Union in January.
(1 euro = 3.3155 Romanian lei)
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