Romania set for new IMF loan in early 2011

President Traian Basescu has stated that Romania will take out another loan from the International Monetary Fund (IMF) in early 2011. The President added that the country will need to borrow 5.7 billion Euro in 2011 only to cover its budget deficit

October 2010 - From the Print Edition

“Romanian has the need of continuing to borrow financial resources to continue developing,” he said in a speech to Parliament. “This is the reason for which, in 2011, Romania will sign a new accord with the IMF.”
President Basescu predicts a growth of two per cent in 2011 on the condition that “reforms are accelerated” and a three to four per cent growth in 2012 and 2013.
But he says this will not be sufficient as the country needs five per cent growth per year to reduce the budget deficit.
The President expects a budget deficit of 6.8 per cent of GDP for 2010, 4.4 per cent of GDP for 2011 and three per cent of GDP for 2012.
Last month the IMF disbursed a further 884 million Euro to Romania - around 11.27 billion of the 13 million Euro bail-out has now been absorbed by the country.
The IMF praised Romania’s “policy implementation” under the Fund-supported programme and urged continued spending restraint and fiscal structural reforms.
“Key measures include the recent pension reform, reforms of the public wage system, tax administration, and health sector, and restructuring public enterprises,” said Murilo Portugal, deputy managing director and acting chair of the IMF. “The initiation of labour market and social safety net reforms will help boost productivity and target limited budgetary resources to the most vulnerable.”