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January 26, 2023

IMF: Romanian economy largely corrects internal, external imbalances, but remains vulnerable to external shocks

The Romanian economy has largely corrected the internal and external imbalances through a mix of solid macroeconomic policies, but Romania remains vulnerable to external shocks, and fixing balance sheets has not been finalized yet, show the International Monetary Fund (IMF) experts in the Declaration issued at the end of their mission to Bucharest.
In this context, the IMF recommends combining sustainable macroeconomic policies with measures to streamline public spending – especially accelerating the uptake of EU funds for upgrading public infrastructure – stepping up reforms dragging in the public enterprise sector and solving the outcome of the downturn in the financial sector.
The IMF says that the discussions with the Romanian authorities have been constructive, but a number of points have remained in suspension, and that it is why the mission will not end with an analysis on the international financial institution’s Board.
‘The teams have had constructive discussions with Romanian authorities on the fulfillment of the objectives of the EC and IMF’s support programme, and have agreed on some key policies in this regard. Despite the significant progress made, a number of points have remained in suspension and discussions will continue next week at the institutions’ head offices. The opinions voiced in this release are those of the IMF team and do not necessarily represent the views of the IMF’s Board. This mission will not materialize with a discussion on the Board,’ the IMF release mentions.
Prime Minister Victor Ponta announced on Monday that the Government had not agreed with the international financial partners upon the increase in natural gas prices and restructuring of the Hunedoara and Oltenia energy complexes, a reason why another letter of intent would not be signed, adding however that the remaining objectives are met.
According to the prime minister, the agreement is in effect and the two issues will be re-discussed in April, and one of them refers to the continuation of the agenda on natural gas price deregulation.
A team of the IMF and the European Commission was in Bucharest, from January 27 to February 9, 2015, to continue the discussions for the third revision of the stand-by preventive arrangement and for the first evaluation of the preventive programme on the balance of payments with the EU.


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