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MEF relies on hydro, nuclear power to reduce trade deficit

The development of hydro and nuclear power facilities will reduce the need for energy raw material imports, and thus narrow down the trade deficit, stated yesterday the Romanian Minister of Economy and Finances Varujan Vosganian, taking part in the EuroMoney seminar in Vienna, Rompres reports.

“The trade deficit, which is a source for the development of Romania, is mostly generated by our exchanges with three partners: Russia, China, and the European Union,” Vosganian said. Since 40 per cent of Romania’s energy supply is imported, the trade deficit in commercial relations with Russia, one of the world’s leading oil and gas suppliers, is substantial. Varujan Vosganian also stated that the Ministry of Economy and Finances (MEF) would propose a number of measures to the Prime Minister, with a view to reduce less important expenses, so as to ensure that the budget deficit (planned to reach 2.8 per cent this year) is lower than in 2007. “But we wouldn’t cut down expenses incurred with investments,” Vosganian added, in the EuroMoney seminar in Vienna, and explained that costs such as those entailed with vehicle purchases for authorities may be cut down. The reduction of the budget deficit is intended to support the central bank’s monetary policy aimed at keeping prices in check. “The only means for the Government to help the central bank is by keeping the budget deficit as small as possible,” says Vosganian. The Minister mentioned that the main factor pushing the inflation rate up last year was the rise in foodstuff prices. “Had it not been for the drought, the inflation rate would have been 4.2 per cent,” Vosganian estimated, and added that he expected an annual 5-5.5 per cent inflation rate in end-2008. Sursa: www.nineoclock.ro

Tags: deficit vosganian trade reduce

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