Romania Fiscal Deficit 2007

Romania's budget deficit widened to about 2.4 percent of gross domestic product last year from 1.7 percent in 2006, according to a report in Ziarul Financiar this weekend. Increased spending in December apparently widened the deficit from 1.1 percent of GDP in the first 11 months of the year, the newspaper said, citing unidentified government sources. The government had promised to increase spending on social areas and infrastructure in 2007 to bring standards closer to the average in the European Union. Many of these aspirations have a lot of merit, but at a macroeconomic policy level it is NOT adviseable to run a fiscal deficit - and an accelerating one at that - when your economy is at serious risk of overheating.