The Romanian Finance minister Sebastian Vladescu announced that a proposal of increasing the current state’s budget deficit three fold, from 0.9% to 2.5% of GDP , is now being debated on, following a discussion with the PM Calin Popescu Tariceanu and the Central Bank Governor Mugur Isarescu.
Vladescu explained that the move would help carry out some projects in the view of the accession to EU by increasing the investment expenses. The Finance minister said that this would not endanger the economic balance.
The PM Calin Popescu Tariceanu also justified the move by increasing the investment funds. Hence, 80% of the sums that are necessary to change the deficit target is to be allocated to investments.
The BNR governor Mugur Isarescu said that the increase of the state’s deficit lowers down the risk of a inflationary pressure and of a too big external deficit. The financing of the budget deficit is to be covered from internal sources.
