The International Monetary Fund (IMF) and Romania agreed to unfreeze tranche of 505 million EUR (664 million dollars) from the precautionary agreement for the country, said the head of the Fund’s mission in Bucharest Jeffrey Franks. Following last year’s budget deficit fell to 4.35 percent of gross domestic product (GDP) of 6.5% in 2010, East side meet the requirements of the IMF and signed safety agreement for 5 billion Franks recalls.
“The Romanian Government should continue with reforms in the country despite the forthcoming elections and the uncertainty in the euro area”, said Franks. “It is essential for Romania is to observe budgetary discipline and to attract foreign investment”. After the initial agreement with the Fund in the amount of $ 20 billion EUR in 2011, Romania has asked the IMF and European Union (EU) new agreement. To ensure international support, this year the government in Bucharest has pledged to reduce its budget deficit to 1.9 percent of GDP. The Washington-based organization lowered its forecast for growth in Romania to 1.5% -2% this year from the original 1.8% -2.3%, citing a slowdown in exports to Western Europe – the main trade partner of Romania Franks states.
“Despite the worsened prognosis we do not see any problems the country to achieve the projected budget deficit”, said Istvan Shaklee, head of the European Commission (EC) in Bucharest. “The markets reward Romania for the progress her This is evident from the successful auction held last week”.
Romania sold 10-year, dollar-denominated bonds for 1.5 billion EUR in yield of 6.87%. By 2013 the government in Bucharest plans to sell medium-term bonds for another 5.5 billion EUR.

Tags: budget deficit, IMF, precautionary agreement, Romania

The article was published on Sunday, February 5th, 2012 at 11:34 pm under the category Financial News. Follow our comments on: RSS 2.0 feed. You can leave a response, or trackback from your own site.