OREANDA-NEWS. June 12, 2009. As the premier Zinaida Greceanii said during the press conference, the previous years, when the inflation rate amounted to 12-13%, the IMF recommended the limit of the budget deficit not exceeding 5% of GDP in order to reduce the inflationary pressures.

Last year the inflation rate made 7.3% and this year the deflation is registered. In these circumstances, the budget deficit may exceed 5% of GDP. At the same time, Zinaida Greceanii said that the newly elected parliament will be proposed to introduce amendments to the budget, providing a decrease in expenditure by 20% (about 1.5 billion leis) as well as the reduction in revenue.

Now 20% of the total public expenditure is blocked (20% of payments to the local public budgets). Greceanii also noted that amendments to the budget will be not introduced by the current Parliament in order to avoid the reduction in social benefits, pensions and payments. She noted that from July 1 the next stage on the law on wages will be implemented. Zinaida Greceanii stated that there is no risk of default in Moldova.

She noted that all external payments are made regularly and NBM currency reserves are increasing, rising by US 1 million - US 1.2 million. On Wednesday, the head of IMF mission in Moldova Graeme Justice said that in the absence of additional measures, the budget deficit in 2009 could exceed 11%. He noted that the parliament should urgently amend the law on the budget to provide a better balance between the budget expenditure and the available funds.