ECONOMY

In Brief

Fund keeps Romania bailout money flowing BUCHAREST (Reuters) – International lenders agreed yesterday to release the next tranche of loans due under Romania’s 20-billion-euro bailout program, easing concerns about the recession-hit country’s finances. Bucharest has slashed public-sector wages and hiked value-added tax to try to cut its budget gap to 6.8 percent of gross domestic product this year, in compliance with the terms of the International Monetary Fund-led aid deal. The IMF’s Romania mission chief Jeffrey Franks said Romania was on track to reach that target and an agreement had been reached at staff level to disburse the next tranche, though wage pressures continued to pose a threat. «(Fiscal) targets for end-September have mostly been reached,» Franks told a news conference. «We still need to see some additional progress,» he said. «The approval of the second round of unified [public-sector] wage legislation, the enactment of the pension law.» The leu traded slightly softer at 4.277 per euro after confirmation of the Fund’s next 900-million-euro payment, which followed completion of an IMF review. The European Commission is in turn expected to disburse a further 1.15 billion euros. Bulgaria budget gap stays flat at 2.1 percent SOFIA (Reuters) – Bulgaria’s budget deficit stood unchanged at 2.1 percent of gross domestic product (GDP) in the first nine months of the year compared with the January-August gap, data showed yesterday. Revenues dropped 6.3 percent to 17.4 billion leva ($12.43 billion) due to a fall in imports which slashed receipts from value-added tax and excise duties, the Finance Ministry said in a statement. Spending edged down 1.1 percent to 18.9 billion leva as a result of the government’s austerity measures, including cutting funds for almost all ministries and transfers to municipalities. The center-right cabinet increased its forecast for the full-year deficit earlier this year to 4.6 percent of GDP from its initial forecast of 0.7 percent after revealing hidden deficits accumulated by the previous government. It also cited delayed payments to businesses and additional spending for healthcare and infrastructure. The Balkan country’s economy shrank 1.4 percent in the second quarter after contracting 5 percent in 2009 as a whole. The cabinet in September approved a budget draft for 2011 that aims to trim the fiscal deficit to 2.5 percent of GDP, hoping that the economy will grow by 3.6 percent next year on the back of improved exports. Sofia pension bill Bulgaria’s government, trade unions and business associations struck a deal yesterday to kick-start a long-delayed reform of the pension system to make it more efficient as the Bulgarian population ages. The agreement ends weeks of wrangling about the size of pension payments and the time frame for changes amid a warning from the International Monetary Fund that a further delay of the overhaul might put pressure on the country’s currency peg. The draft of the pension overhaul law is expected to be formally endorsed by the center-right cabinet tomorrow and then sent to parliament for final approval. Prime Minister Boyko Borisov said the accord would guarantee the stability of the heavily indebted pension system by 2035. (Reuters) Turk exports Turkey’s exports rose 8.84 percent year-on-year in October to $10.79 billion, the Turkish Exporters’ Assembly (TIM) said yesterday. The TIM figures come almost a month before official statistics institute trade data, which they tend to match. Turkey’s exports rose 11.41 percent in the January-October period to $92.67 billion, the assembly said. (Reuters) Nuclear power talks Turkey Energy Minister Taner Yildiz said yesterday there were problems in negotiations with South Korea on building a nuclear power station in Turkey. Yildiz said the negotiations on the Sinop nuclear power plant, slated to be the country’s second plant after a planned station on the Mediterranean coast, should reach a conclusion by the weekend. Negotiations are ongoing between Korea Electric Power Corp (KEPCO), Turkey’s Energy Ministry and state power producer Elektrik Uretim for a nuclear power plant near the Black Sea town of Sinop. (Reuters)