Business News
Romania passes austerity budget for 2012
Dec 15, 2011, 16:15 GMT
Bucharest - The Romanian parliament on Thursday passed an austerity budget for 2012, projecting a deficit equalling 1.9 per cent of gross domestic product (GDP), growth between 1.8 and 2.3 per cent and an inflation rate of 3.5 per cent.
The budget allocates less for subsidies, 0.91 instead of 1.2 per cent of GDP in 2011, and public sector salaries, reduced to 6.9 from 7.4 per cent.
Prime Minister Emil Boc's cabinet has also built further public sector workforce reductions and privatization of state companies into the budget, as recommended by the International Monetary Fund (IMF).
Romania presently has a precautionary 3.6-billion-euro (4.7 billion dollars) loan from the IMF, which provides emergency funds in case a country needs them to shore up financial stability.
Hit hard by the global economic crisis, Romania already received a 20-billion-euro loan from the IMF and European Union over two years from May 2009. In return, it carried out painful reforms to curb spending and stabilize state finances.
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