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Romania's Social Democrats promise to keep down budget shortfall ahead of election

BUCHAREST (Reuters) - Romania's Social Democrats Party, which leads opinion polls before a Dec. 11 election, has pledged to raise social spending in 2017 and plans to offset this with ministerial budget cuts to help keep down the budget deficit.

According to plans published on its website late on Wednesday, the PSD, which dominates parliament and local government, also said it estimates an economic growth of 5.5 percent in 2017.

The International Monetary Fund expects Romania's economy to grow by about 5 percent this year, which would make it the most rapidly expanding economy in Europe.

Romania has been run by the technocrat government of Prime Minister Dacian Ciolos since late 2015, replacing the cabinet of the then ruling PSD which quit after mass anti-corruption protests erupted after a deadly fire in a nightclub.

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According to its plan, the PSD -- if elected -- would seek a budget deficit equivalent to 2.7 percent of gross domestic product, compared to Ciolos' target of 2.9 percent for 2016.

The European Commission expects Romania's budget shortfall to rise to 3.2 percent of GDP in 2017, compared with last year's 0.8 percent.

Aside from a 15 percent wage increase in the public health and education sectors already approved by parliament, the PSD wants to hike minimum pensions by 30 percent to 520 lei ($125) a month and boost welfare spending to a combined 152 billion lei against 138 billion lei in 2016.

To offset these hikes, it plans to cut goods and services-related spending in the 2017 budgets of the finance, energy and communications ministries, as well as of parliament and government, by 10 percent to 38.9 billion lei. By contrast, the health and national defence ministries would have their budget hiked, the document said.

The PSD governed Romania for a total of about 17 years in various coalitions since the 1989 fall of communism.

While opinion polls show the PSD has about 40 percent support followed by their centre-right rivals National Liberal Party with 27 percent, without an outright majority it may lose its chance to form a government if a stronger coalition emerges.

(For a graphic of voting intentions for the Dec. 11 election: http://tmsnrt.rs/2ggIpTU)

(Reporting by Radu Marinas; Editing by Raissa Kasolowsky)

 
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