Statement by IMF Mission Chief for Romania

A mission from the International Monetary Fund (IMF) visited Bucharest from October 20 to November 1. Mr. Jeffrey Franks, IMF Mission Chief for Romania, made the following statement at the end of the visit:"We have reached agreement at staff level on the sixth review of the Stand-By Arrangement. Subject to approval by IMF Management and the Executive Board, the seventh disbursement (SDR 769 million or almost €0.9 billion) would become available.

"Preliminary data for the third quarter suggest that the performance criteria were met, with the exception of the ceiling on general government arrears. The government has promised that firm action will be taken to ensure that central government arrears are mostly eliminated for the remainder of the program.
"Economic activity is now stabilizing and we expect growth of 1½-2 percent in 2011 (compared to around -2 percent in 2010). Headline inflation has jumped in recent months due to the effects of the necessary July VAT increase and food price pressures. We expect inflation to peak at slightly above 8 percent at end 2010 before returning within the National Bank of Romania’s target range in the course of 2011. We project a current account deficit of 5-6 percent of GDP for 2010.

News source: IMF link: article