A new IMF mission in Bucharest
A joint mission of international lenders is assessing in Bucharest the stand-by agreement concluded with Romania last month.
Corina Cristea, 22.10.2013, 13:15
These days Bucharest is being assessed by the international financial institutions to which it has applied three times since the start of the economic crisis. The current precautionary agreement was approved by the IMF Board of Directors on September 27th, will last for 2 years and is worth 2 billion euros. Until November 5th the joint IMF, European Commission and World Bank mission will look into the recent economic developments and the priorities of the economic reform in Romania, talks focusing on budget execution, fiscal measures and the 2014 budget.
Analysts don’t expect the mission to find major problems regarding macroeconomic targets, the more delicate issues being those related to structural reforms and real economy. Economic analyst Aurelian Dochia:
“I’m convinced that talks will focus on the latter issues, given the recent failure to privatize CFR Marfa- the freight division of the Romanian Railway Company. Actually the privatization of CFR Marfa was one of the top priorities laid down in the agreement with the international lenders, as the company incurs losses every year and the amount of arrears is huge”.
The 2014 budget will be built on an economic growth of 2.2%, a 3% inflation rate and a national currency/euro exchange rate of 4.45 lei per one euro. Minister Delegate for Budget, Liviu Voinea said that a possible drop in fees and taxes, if revenues allowed it, might be approached during the talks. Actually the agreement was started with an exception from the most important quantitative criterion, that of the budget deficit, the target for September being augmented by one billion lei. This is a result of the very low budget revenue collection rate, which after 8 months stood below the estimated figure. The letter of intent sets nominal budget deficit targets for the first half of 2014, when the authorities pledged to observe a maximum ceiling of 1.4 billion euros.
