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January 16, 2022

IMF estimates – 4.1 pc for GDP and 5.9 pc inflation rate in Romania in 2009

For 2010, IMF expects an improvement in the main indicators and they anticipate zero economic growth, a decrease in the current account deficit to 6.5 pc of GDP and 3.9 pc inflation rate.

The International Monetary Fund (IMF) expects a negative economic growth of 4.1 per cent, with the current account deficit reducing to 7.5 per cent of GDP and an inflation of 5.9 per cent, levels close to the indicators based on which the draft budgetary rectification recently approved by the Government. According to Mediafax, the budgetary rectification done by the Executive following the external funding agreement with IMF and EU is based on a negative economic growth of 4 per cent, an inflation of 5.8 per cent and a current account of 7.5 per cent of Gross Domestic Product (GDP).

For 2010, IMF expects an improvement in the main indicators compared to 2009, so that the forecasts indicate zero economic growth, a reduction in the current account deficit to 6.5 per cent of GDP and an inflation of 3.9 per cent. In 2008, the annual inflation rate exceeded by 1.5 points the high end of the range targeted by BNR, 2.8 – 4.8 per cent, being 6.3 per cent. BNR set, both for 2009 and for 2010, similar inflation targets, 3.5 per cent plus/minus a percentage point. The most recent BNR forecast indicates an annual inflation rate of 4.5 per cent for the end of the year and 3.2 per cent for December 2010. The annual inflation rate in each quarter will be a performance criterion within the agreement concluded with IMF, and the exceeding by two percentage points of the central level set needs adoption of measures, as an obligation for the continuation of the program. Within the understanding with IMF, performance criteria were set for June and September 2009, when the annual inflation rate should fit within a range of plus / minus one percentage point compared to the central level set to 6.4 per cent and to 5.7 per cent respectively. In case that the annual inflation exceeds the range reminded, BNR will hold talks with IMF experts for evaluation. In case the consumer prices vary by more than two percentage points compared to the central level, then the authorities shall have talks with IMF on the measures to be adopted, in the absence of which the agreement cannot continue. Romania registered 7.1 per cent economic growth last year, but GDP advance slowed down abruptly to 2.9 per cent.

Regarding the current account deficit, IMF forecasts for 2009 and for 2010 are much below the level registered in 2008, 12.5 per cent of GDP respectively.

Fin Min Pogea: We have not yet received the letter

The Romanian authorities have not received yet the official letter from IMF regarding the foreign loan, as Gheorghe Pogea, Minister of Public Finances, declared yesterday at Palace of Parliament. The official letter of IMF is the answer of the international financial institution to the letter of intention conveyed by the Romanian authorities in relation to the loan agreement. The letter will be returned by IMF to the Ministry of Finances for signing, and then it will be conveyed to the European Commission for approval within Ecofin Council, to be held on May 4–5.

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