ECONOMY FINANCE&BANKING

New agreement with IMF to be negotiated in March 2016

The International Monetary Fund’s (IMF) next mission in Romania will take place in March 2016, Finance Minister Eugen Teodorovici stated. The signing of a new agreement and its terms could be discussed then.

According to him, the talks should focus solely on the agreement’s general framework, while its details should be discussed and assumed by the future Government.
“The IMF will come in March next year. What was left unresolved from the old agreement remains to be implemented until then. We will send a letter to the Fund and we will post what remains to be accomplished from the agreement that ended… We want to fulfill what remains from the old agreement. Concerning Ordinance 109 (OUG 109/2011 on the corporate governance of state-owned companies), we will no longer accept exceptions on the list of companies,” Teodorovici stated.
According to Teodorovici, the World Bank and the European Bank for Reconstruction and Development (EBRD) will handle the implementation of Ordinance 109.

This year the Government will fall within the 1.86 per cent of GDP (RON 13 bln) deficit target, and for next year it aims for an ESA deficit below 3 per cent of GDP.

The International Monetary Fund (IMF) estimates a budget deficit of 3 per cent of GDP in 2016 and above this level in 2017 on account of the massive tax cuts and salary hikes announced, while the international financial institution’s recommendation is for the deficit to be 1.5 per cent of GDP next year.
IMF officials point out that in recent years Romania has registered a considerable improvement of macroeconomic indicators, however protecting these accomplishments is crucial against the backdrop of rising risks of lower-than-expected developments at global level, particularly in emerging economies.

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