IMF mission to assess agreement arrives in Bucharest today

An IMF delegation, headed by Jeffrey Franks, arrives in Bucharest on Tuesday, for the first assessment of the stand-by agreement, approved by the board of the institution in May, and the discussions will be concluded on 10 August, IMF representative for Romania and Bulgaria, Tonny Lybek, told Mediafax.

"The first assessment mission will start working in Romania on Wednesday, 29 August and will have the final meetings on 10 August. Meanwhile, the delegation will meet with Romanian authorities, trade unions, business associations and banks," said Lybek.

He said that the visit was part of the regular quarterly assessment missions and aimed at analysing the achievement of the targets negotiated in the agreement, the progress achieved in the fiscal sector, in the public pensions system and in monitoring state companies, in the sense of reducing the risk of accumulation of debt.

As regards the performance criteria negotiated within the loan agreement, the IMF representative said they could be amended if it would be demonstrated that there were external factors that would lead to failure of meeting the targets.

"The economic contraction in the first quarter was below our expectations, and in the second quarter the situation deteriorated a little," Lybek said. In July, at the request of Romanian authorities, the IMF sent two technical assistance missions to Romania, to analyse the management of public finances and of taxes.

The first delegation, which was in Bucharest in the first two weeks of July, examined the situation of public finance management, namely the procedures to be followed for a medium-term budgetary framework, and the second, which was in Romania for the last two weeks of July, analysed tax management, namely the way in which the law is implemented.

Official sources told Mediafax about two weeks ago that the IMF is working on a new macroeconomic framework for Romania in the context of the first assessment of the stand-by agreement, in early August, which anticipates, among others, the accentuation of economic decrease this year from 4.1%, the current forecast, to 7-8%.

In the first quarter, the economy contracted by 6.2% as against the same period last year.
In negotiating the agreement in March, the Romanian authorities and the IMF mission, headed by Jeffrey Franks, agreed on performance criteria for the budget deficit and the inflation, staring from a macroeconomic scenario based on a 4.1% decrease of GDP this year.

Curierul National