The finance ministry cancelled the issue of government bonds initially scheduled for May 4, citing better than expected Treasury revenues. The government reserve position will remain high in the near run, according to projections mentioned by the press release. Tax revenues have increased by 24.25% year-over-year in the first quarter, according to the ministry. In April, the finance ministry announced RON200 million [$72 million] of government bonds to be issued in Q2. For the whole of 2006, the government announced RON4.15 billion [$1.45 billion] of public debt to be issued on local market.
Sluggish public expenditures are possibly a result of infrastructure projects being delayed by the recent floods. Separately, the money spent formally last December [when the fiscal deficit peaked to 1.8% of GDP] has probably not been drained with projects sooner than the first quarter of this year, which also postponed new projects. Generally, the seasonal pattern of public expenditures may also indicate a poor administration’s ability to spend money for investment projects – particularly co-financing of projects supported by the European Union.