ECONOMY

In Brief

Romania to stick to budget gap goal in IMF talks BUCHAREST (Reuters) – Romania will stick to a previously agreed budget deficit target for 2010 in talks with an International Monetary Fund review mission starting next week, Finance Minister Sebastian Vladescu said yesterday. Some market watchers had expected Bucharest would ask the Washington-based lender to agree to a bigger shortfall following a recent move to hike value-added tax and flooding earlier this month, which caused losses of up to 0.3 percent of gross domestic product. «All I can say is that the deficit will stay at 6.8 percent [of GDP],» Vladescu told reporters. An IMF mission, due to review Romania’s 20-billion-euro aid deal, will visit Bucharest from July 26 to August 4. Analysts said the government’s pledge to keep the deficit unchanged would support its drive to shore up public finances: «It is of paramount importance that they do whatever is in their power to meet the target,» said UniCredit Tiriac Bank chief economist Rozalia Pal. «They’ve already taken some steps in this direction.» Iran, Turkish firm sign 1-bln-euro gas link deal TEHRAN/ANKARA (Reuters) – Iran’s Oil Ministry said the country had signed a 1-billion-euro pipeline deal to take gas to Turkey and a Turkish firm called Som Petrol said it was the partner in the project. «The 1-billion-euro deal to build a 660-kilometer gas pipeline was signed on Thursday during the Iranian oil minister’s trip to Turkey,» the Iranian Ministry said in a statement yesterday. A senior Iranian official said Iran would pay a transit fee to export its gas to Europe using the pipeline crossing Turkey. «The pipeline will enable Iran to export 50 to 60 million meters of gas per day… It will be constructed within three years,» Javad Oji, head of the National Iranian Gas Export Co (NIGC), told the Iranian Oil Ministry’s official website SHANA. Oji was quoted by the Mehr news agency as also saying that 23 percent of the project would be handled by the Iranian side and 77 percent by the Turkish side. One of the world’s biggest oil and gas producers, Iran has been hit by US and UN sanctions that have hindered access to foreign investment and slowed its development as a major exporter. The website identified NIGC’s Turkish partner as ASB Co, but Som Petrol said it had signed the deal. «We signed the agreement on the Iran-Turkey pipeline yesterday,» Som Petrol’s Chairman Sitki Ayan told Reuters. Credit growth Greece’s total credit expansion slowed to a 4.8 percent annual pace in May from 6.1 percent in April, Bank of Greece provisional data showed yesterday. Credit extended to business and households in May slowed to an annual 2.8 percent clip compared to 3.2 percent in the previous month. (Reuters) Bulgaria FDI Bulgaria expects to attract around 2 billion euros in foreign direct investment (FDI) in 2010, down 38 percent on the year, the head of the country’s investment agency said yesterday. Borislav Stefanov had said in May that foreign inflows, viewed by analysts as a key factor in returning the recession-hit Balkan country to growth, were seen remaining similar to last year’s levels of about 3 billion euros. «I [now] think 2 billion euros is more realistic,» he told Reuters in a telephone interview. Foreign inflows fell by more than 50 percent to 3.2 billion euros in 2009, as many investors, hit by the global financial crisis, fled or significantly cut their operations. Given the economic situation at the time, that figure was nevertheless «slightly better than what it should have been,» Stefanov said. The poorest country in the European Union saw its economy contract 5 percent last year. Sofia expects growth of 1 percent this year and 3 percent in 2011 as exports continue to rise and demand in Western Europe, Bulgaria’s key export destination, recovers. But Bulgaria, one of the last countries in Eastern Europe to enter recession, is now also lagging in its economic recovery and analysts only see growth of up to 0.3 percent this year. (Reuters)