IMF returns to Romania for new review mission

A joint team from the International Monetary Fund, European Commission and the World Bank arrived last week in Romania to conduct the fourth review under the EUR 5 billion stand-by arrangement.

The review mission will meet with representatives of the government, the business environment and civil society organizations. Meanwhile, the protests in Romania continue, although the cold weather has reduced the number of people that are calling for President Traian Basescu and the government to step down. Protesters are also angry about the austerity measures that have affected the living standards of ordinary citizens.     

Romania’s economy is predicted to grow this year, although forecasts from international banks point to a sluggish recovery from the recession. The European Bank for Reconstruction and Development (EBRD) estimates a 0.8 percent growth while the World Bank forecasts 1.5 percent. Central and Eastern Europe will grow by 1.1 percent according to the IMF.

The prime minister, Emil Boc, said late last month that Romania would reach an absorption rate of EUR 6 billion of European funds to create additional growth and jobs.  

Menno Snel, IMF executive director for the Balkans and Eastern Europe region, told President Basescu in an official meeting that Romania was performing well in containing the effects of the crisis.

Read more about

Creating Social Media Posts That Drive Traffic To Your Website

read more

“In the last meeting there were many compliments on the manner in which you have administrated the country during the crisis,” said Snel.

Jeffrey Franks, chief of the IMF mission, met last week with the heads of fiscal institutions to discuss the collection of revenue for the budget.

Romania had a budget deficit of 4.3 percent of GDP in 2011, according the Ministry of Public Finance. Revenue to the consolidated budget hiked by 7.6 percent to RON 181.6 billion, mainly due to increased collection of VAT, income tax and social contributions. Personnel expenses decreased by 10.1 percent, subsidies fell by 4.9 percent, while social assistance costs dropped by 0.9 percent. Last year, public investment rose 12 percent to RON 37.8 billion.    

Ovidiu Posirca