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Romania: IMF Promises Flexibility
Bucharest | 30 July 2009 | The head of the IMF mission to Romania, Jeffrey Franks, said Thursday that the Fund is willing to be flexible in reviewing Romania’s reform progress.
Frank’s announcement came after talks on a two-year IMF loan programme, designed to help the Balkan country deal with the effects of the global financial crisis.
Romania will ask the IMF to allow it to run a budget deficit of up to 7 per cent of GDP this year, Reuters reported, citing sources close to the negotiations.
The current budget, agreed with the IMF, projects a deficit of up to 4.6 per cent of GDP for 2009, factoring in an estimated 4 per cent downturn in the national economy.
Romania’s economy contracted by 6.2 per cent in the first quarter of this year, compared to the same period in 2008, according to statistics.
The IMF mission arrived in Romania on July 29 to evaluate the degree to which the country has fulfilled the commitments made in securing the IMF funding agreement.
The mission will end on August 10. The IMF will then decide whether the Romanian authorities met the specified benchmarks and whether the second instalment of the loan, worth 1.9 billion euros, will be paid.
The IMF delegation will also draw up a report, which will be discussed by the IMF board at the end of September.
Romania sealed a 19.95 billion euros financing agreement with the IMF, the EC, the World Bank, the European Bank for Development and Reconstruction and the International Finance Corporation in March. Source: Balkaninsight
