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IMF comes to evaluate reforms: the discussions to start will be

IMF could require Romania more strength in applying reforms, the bankers and analysts say, the discussions starting tomorrow will be tougher than in the past.

'The positive aspects are connected to the fact that as the officials of the ministry of finances the quantitative target of March for the budgetary deficit was reached and the criterion for passing the law regarding fiscal responsibility was met. Practically, quantitatively, the vast majority of targets were met' the head economist at Raiffeisen Bank Ionut Dumitru explained for HotNews.ro.

The social bill could not be adjusted and I think that tougher measures are necessary. According to him, the negative aspects are connected to missing the targets connected to debts and the fact that the budgetary deficit target was met while the debts were increased, meaning no bills were paid and no reduction of capital expenditure. ' If we have a look, the capital expenditure dropped very much for the first two months of the year and probably in March will be the same situation. At the level of budgetary procedure we have a serious problem, namely income drops and expenditure increases.

« We didn't pay the social bill and I think tougher measures are necessary to fit into the budgetary deficit and we meet our assumed obligations' Dumitru says. The present IMF mission will prepare the fourth report on the economic programme of Romania which will be discussed by the board over the second half of June. The Fund officials will meet the representatives of the ministry of finances, economy, transports, work and the leadership of the National Bank and other commercial banks.

We assumed certain things and we did very little. According to the representative of the Austrian bank, the delegation will require « tougher measures, under the conditions where the budget is not right. We assumed some things and we did very little. I don't think they will require lay-offs. IMF has always said that they don't give solutions. We assumed a reduction of budgetary expenditure.

As far as I saw in the statements of Mr.Tanasescu the salaries bill as a percentage of GDP, the reduction target is non-negociable, thus it is clear we have to act here. The things are difficult and as the economic growth prognosis was decreased, this means other budgetary figures' Dumitru said.

The discussions will include the problem of budgetary deficit, the Fund officials say. ' We have to tackle fiscal aspects, as Romania had some fiscal imbalances before the crisis, when the deficit was over the limit of 3% as established by EU. We have to analyse these deficits' the head of IMF to Bucharest said for Agerpres.

The present visit to Bucharest takes place in the context where IMF revised by decreasing from 1.3% to 0.8% the prognosis of GDP growth which could create some pressure on budgetary collection, which could make the Fund accept a budgetary deficit higher than 5.9% for Romania.

BNR is relaxed. Homework is done

The only ones who calmly wait the visit are the National bank officials. ' Every time they came to us, they left very satisfied. They made it public that BNR did their homework thoroughly. We have a cup of coffee prepared for them tomorrow.' the officials of the bank said .

« A decreasing revision for the Romanian economy may lead to a type of analysis which adapts the budget to the new conditions. It is important to keep the decreasing trend for the budgetary deficit even if there will be a slight increase of the deficit, as this is a signal for the perception of the foreign markets' Tanasescu said.

« There will be a discussion regarding the increase of budgetary deficit starting from the present conditions. Maybe there will be an increase of the deficit, but we must see if there is reduction of expenditure, which are the next steps to take and what the government proposes. It is there will be discussion' he added.

An IMF mission would visit Romania between April 27-May 7 for the quarterly evaluation of the funding program. Following the IMF evaluation, Romania may receive a fifth installment of the stand-by accord, amounting to 850 million euro, in June, should it meet the terms set in this regard.

Sursa: http://www.actmedia.eu

Tags: expenditure which there discussions deficit romania budgetary officials euro bnr