Stiri	Stiri afaceri	Stiri companii	Evenimente de afaceri

Jeffrey Franks, IMF: Romania’s exports increase way faster than markets where it sells increase

Restructuring and the continuation of reforms were the main key points made by Jeffrey Franks in his speech presenting the first evaluation of the latest agreement with Romania.

He said that that the government will use a foreign HR company to bring new managers for a series of state owned companies. According to the IMF official, debts of the state owned companies increased to 4-5% of GDP.

Romania risks paying 1.5 bln. euros back to EU

Romania risks being compelled to give back up to 1.5 billion euros to the European Union, money the former has been already paid, if some pre-accession projects fail being finished by the year end, IMF mission's head Jeffrey Franks told a news conference, on Monday. IMF official said that Romania has made progresses in the absorption of the EU structural funds, it will not suffice, but they must be doubled. 'Low priority projects must be postponed and efforts must be focused on the high priority fields where absorption can grow much more rapidly,' said Franks.

EUR 475 ml available in first tranche under new IMF agreement

The first tranche made available under Romania's new precautionary agreement with the IMF will be 475 million euros out of a total amount of 3.6 billion euros, IMF chief for Romania Jeffrey Franks on Monday told the press conference for the presentation of the outcomes of the review mission. The new round of negotiations with the IMF, concluded on May 9, started in Bucharest on April 27 and consisted of the first evaluation of Romania's new precautionary agreement with the Fund.

The draft letter of intent was completed on Saturday, before the meeting of the IMF mission team with President Traian Basescu. Romania's stand-by agreement with the IMF, running as of March 31, 2011, is of a precautionary type and entails 3.1 billion SDRs, or 3.6 billion euros, representing nearly 300 percent of Romania's quota in the IMF. The entire amount of 3.6 billion euros will be directed to the National Bank of Romania (BNR).

Romania economy to grow some 1.5 pct in 2011

Romania's economy begins to recover and to resume growth, that will reach some 1.5 percent in 2011, backed by the powerful exports and the gradual improvement of demand, the International Monetary Fund chief of mission for Romania, Jeffrey Franks told a news conference on Monday, in which he unveiled the results of the national economy's assessment.

'Progress has been good, quantitative targets have been met and we have reached an agreement with respect to the policies further required. /.../ The growth is expected to speed up in 2012, to reach 3.7 - 4 percent,' Franks said.He warned, however, that the inflation had increased faster than estimated, but it was largely the result of the pressure put by the international foodstuff and fuel prices and of the rise in the managed prices.

'We expect the inflation at end-2011 to stand at more than the 5 percent level estimated by the BNR', the IMF official said, adding the National Bank 'could be forced to adjust its policy in the next months in order to attain the 2012 inflation target.'

CAS cut, minor factor in encouraging investments and economic growth

The reduction of the social security (CAS) by a few percentage points is but a minor factor in encouraging more investments and in developing businesses in Romania, believes IMF mission chief Jeffrey Franks. I think the social security cut by a few percentage points is but a minor factor in encouraging extra investments and developing business. Setting up the conditions for Romania's development would be a much more compelling factor. That is why I incline towards the implementation of the reforms programme rather than to a cut in the social security, as I myself think that bringing billions of euros from the EU, billions of euros' worth of private investments to the state-run companies, making the governmental policies more stable, all this is meant to attract more investments than a CAS cut by 2 or 3 percentage points, Jeffrey Franks told Agerpres in an interview.

The IMF official said Romania needed a fiscal system provided with a wide collection range and low taxation levels. I would like to see a reduced VAT as well, not only a cut in CAS. The only way you will achieve this is by collecting enough money. The first thing to do is to amend the fiscal administration problem, along with creating a better collection and fighting tax evasion rife in the grey economy. Once Romania successfully collects its due taxes, it will reach a solid ground and will afford to reduce taxes, as these lower taxes will be accompanied by more money. We cannot begin by tax cutting and expect money to flow then.

Franks added that no other fiscal moderation had been discussed during the agreement evaluation, apart from the cut in CAS. We discussed the CAS cut matter and I believe we reached an understanding to wait for several more months to see how the 2011 and 2012 budget revenues look like. The appropriate time to approach other measures of fiscal moderation will come up during the talks about the budget and the budget rectification in the months to come, added the IMF official.

Central bank might have to adjust policies in months to come

The National Bank of Romania (BNR) will have to stay cautious to a new wave of inflation pressures and might have to adjust its policies in the months to come in order to reach the 2012 inflation target, chief of IMF mission Jeffrey Franks told a news conference on Monday.

Referring to the inflation targets being missed in the past few years, Franks said that BNR could not control world prices of energy and food and that Romania's central bank did a very good job when it made sure that these foreign shocks did not turn into a generalized inflation in Romania.

The IMF official said that although BNR missed the inflation targets in the past few years, a chart of the inflation in this span of time might show clearly that the trend was on the decrease and inflation was no longer a problem for Romania as it used to be ten years ago.

Sursa: http://www.actmedia.eu

Tags: romania mission romanias inflation cas investments jeffrey months billion increase franks first agreement official euros bnr bnr

Articole similare