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Romanian Cabinet Backs 2011 Budget With Tighter Gap to Qualify for Bailout

Romania’s government approved a budget draft for 2011 late yesterday to qualify for international bailout loans, and will send it to Parliament for debate and approval by the end of this year.

The 2011 budget plan foresees spending cuts to target a deficit of 4.4 percent of GDP next year, from a target of 6.8 percent this year, after the government raised a value-added tax and cut public wages to keep its International Monetary Fund-led bailout going, Finance Minister Gheorghe Ialomitianu said in an e-mailed statement. The budget envisages economic growth of 1.5 percent next year, after output will probably contract for a second year in 2010 and shrink as much as 2 percent.

To contact the reporter on this story: Irina Savu in Bucharest at isavu@bloomberg.net.

To contact the editor responsible for this story: James M. Gomez in Prague at jagomez@bloomberg.net

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