However, Basescu added the agreement with the IMF would continue, as Romania met the first semester objectives.
“Romania cannot fulfill the targets set in the agreement for several reasons. The most important is the larger than expected economic contraction,” Basescu said in an interview with the public radio.
Romania’s budget for 2009 is based on a gross domestic product contraction of 4%.
“If the economy falls by more than 4%, the budget receipts will be lower than the projected ones, therefore the public deficit will be larger,” the President added.
Romania negotiated with the IMF a budget deficit target of 4.6% of GDP.
An IMF mission is currently in Bucharest for the first evaluation of the agreement.
The mission head Jeffrey Franks said earlier Thursday that the IMF will be more flexible in negotiations, as Romania’s economic situation worsened.
Government sources told Mediafax the authorities want to raise the budget deficit target by three percentage points.
Romania’s first-quarter GDP fell 6.2% on the year, but several analysts estimated a sharper contraction for subsequent quarters.
Earlier Thursday, Finance Minister Gheorghe Pogea said the GDP may fall 8% for the whole of 2009, adding the forecast contraction agreed with the IMF would be revised.
Romania and the IMF agreed on a EUR12.95 billion two-year standby loan, as part of a EUR19.95 billion financial support package that also includes funds from the European Commission, and other international institutions.