The Finance Ministry managed to slow down the growth of thebudget deficit to about one quarter of the average of the previousmonths.
The budget deficit rose by almost one billion RON in August andreached 20.9 billion RON (5 billion euros), that is about 4.1% ofGDP compared with the annual indicative target of 6.8% of GDP,Finance Ministry sources say.
The growth pace of the deficit slowed down after the almost twobillion RON increase in July and the monthly variations of overfour billion RON in the spring.
Revenues went up by 13.8% to 106.25 billion RON in August, whilespending progressed by 12.2% to 127.16 billion RON.
"The deficit was quite low in August. The public sector salary cuthas already showed as it dragged spending down quite a lot.Revenues probably went up, as a result of the VAT hike," commentedNicolae Chideşciuc, chief economist of ING Bank.
He added that a possible explanation for the low deficit levelmight be the fact that arrears were not paid in August but largelyin September. As a result, he expects the deficit to see a higherincrease in September, by 1.5-2 billion RON.
Cutting arrears down to zero was the main requirement of the IMFduring its previous review mission so that the state would stopbeing an arrearage-generating factor in the economy.
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