ACPR: IMF estimate of a 5.1% GDP increase cannot be reached if economy drops in 2010

Publish date: 05-05-2010
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The IMF estimate about an economic growth in 2011 which indicates an advance of 5.1%, the highest in EU, may not be reached if Romania registers this year an economic drop, according to representatives of ACPR( Alliance of Romanian Employers' Confederations). The IMF message conveyed at last week's meeting hides the fact that Romania will have an economic drop in 2010. We do not know exactly how much, 1-2%. It is unusual for IMF to get over its predictions twice. We are curious if the IMF prognosis which indicates that Romania will have the highest economic growth in EU in 2011 is maintained, said Dan Matei Agathon on Tuesday.

The Fund reduced two weeks ago the estimate about Romania's economic growth from 1.3% to 0.8% in 2010 but it anticipate a GDP advance of 5.1% in 2011.

The IMF delegation met last week with representatives of patrons' organizations who declared at the end of talks that the Fund could again review the prognosis about Romania's economic growth in 2010 from 0.8%m the optimistic provision being zero growth.

The Fund is inflexible as concerns the deficit, inflation and other provisions from the accord with Romania. Maybe they will accept only the increase of arrears. IMF said at the meeting with patrons that the government will either drop budget expenses or will increase taxes, Agathon added.

Sebastian Vladescu, the minister of public finances declared on Monday that one of the analyses discussed with the IMF team indicates an economic drop this year, but a final estimate has n ot been made yet.

On the other hand, he said that the accord with IMF is the only anti-crisis program in Romania and the government should observe the understanding, by reducing budget expenses. "The business environment cannot accept tax increases because it will lead to higher unemployment, to closing down companies. We have an economy with very high taxes and applying taxes to high incomes will not solve Romania's problems. Big fortunes are hidden," Agathon showed. He added that ACPR supports the promotion of a law in the field of trhe public private partnership which would solve the question of funds needed for investments in economy.

"It was Anca Boagiu's initiative about such a law. In the meantime, the suggestions to amend the law on public purchases included a few amendments which would define the frame of the public private partnership. We want this law for big investments," the ACPR representative added.

In his opinion Romania needs a clear law in the field, which should be understood by any investor from any country, which could make private investment funds available. ACPR includes nine patron federations and five business associations.

An IMF mission is in Bucharest over 27 April-7 May for the fourth round of revision on the standby accord concluded between Romania and the international financial institution.

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