Breaking the structural reform deadlock - essential, IMF official says

Fernandez-Ansola holds the view that the private sector, which is “quite dynamic and full of resources,” is the strong point of the economy.

Following a year of few achievements in the area of structural reforms, Romania should break this deadlock, the representative for Romania and Bulgaria of the International Monetary Fund (IMF), Juan Jose Fernandez-Ansola, said during an interview.

The IMF official mentioned that in 2007, Romania has been characterised by several positive factors that backed the strong economic growth, yet lower than 2006’s, and slowed-down reforms. Fernandez-Ansola outlined that as from August-September, he noted worrying developments such as rising inflation, deepening current account deficit at an unsustainable pace.

Speaking of the reforms during the year when Romania joined the EU, the IMF official said he had not seen much in this area.

Asked whether the slowed-down economic growth and reforms have been correlated with a certain laid-back attitude by authorities, he said he finds it hard to link it to a particular event, yet it is up to the government officials to answer that question.

Fernandez-Ansola holds that reform-wise, Romania should aim at higher productivity, investment incentives, direct foreign investments especially and developing human resources. He also said that the energy sector, “not the whole sector, but only some companies”, is one of the fields whose modernisation would lead to higher productivity.

Other priorities are the development of the labour market, with respect to drawing young and older people through incentives, the minimum salary and of the geographic mobility of the work force, as well as reforming the public sector.

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