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October 23, 2021

Iohannis-IMF discussions: Romania should not deviate significantly from a prudent fiscal-budget approach

President Klaus Iohannis welcomed at the Cotroceni Palace on Tuesday a delegation of the International Monetary Fund (IMF) led by Mission Chief to Romania Andrea Schaechter. During the talks it was highlighted that Romania should maintain a prudent approach in regards to next year’s budget.

“In what concerns the 2016 budget, it was pointed out that Romania should not deviate significantly from a prudent fiscal-budget approach, in order to prevent a number of macroeconomic risks. To this respect, on the short term, it is necessary to keep the budget deficit under control, as an element of responsibility and caution in regards to the economic policy decisions, for the positive economic forecasts to be reflected by a sustainable economic growth,” a statement by the Presidential Administration shows.

During the meeting, the IMF representatives presented the head of state with the most important developments of the precautionary assistance programme which expired in September, according to the Presidential Administration, without a favorable final assessment, which raised doubts about the government’s will to implement the undertaken structural reforms.

“Given that there are serious reservations that Romania meets the necessary conditions in order to benefit from a Flexible Credit Line agreement, the Romanian President has expressed concern about the vulnerabilities which can affect the future fiscal-budget framework,” the statement said.

Furthermore, the discussions reiterated the special importance to overcome delays in structural reforms, in particular in what concerns the efficiency of state companies, with special attention being paid to the sectors of energy and transport. According to current assessments, the absence of structural reforms may become, on medium and long term, a major obstacle for economic performance, the statement added.

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