Wednesday, May 30, 2007

IMF: Romania's economy expected to continue strong growth despite political disputes

Associated Press

BUCHAREST, Romania: Romania's economy remains attractive for foreign investors and will continue to expand strongly this year despite continuing political disputes, an International Monetary Fund official said Tuesday.

The fund's representative, Juan Fernandez-Ansola, said the IMF expects the Romanian economy to grow by 6.5 percent to 7 percent, boosted by strong direct foreign investment. He said the growth was occurring despite political disputes that led to the temporary suspension of President Traian Basescu.

Basescu was reinstated after easily winning an impeachment referendum on May 19 with about three-fourths of the vote.

Fernandez-Ansola warned, however, that imports were growing faster than exports due to consumer demand and the current account deficit could reach 11.1 percent for 2007.

He urged the government to keep a public wages under control, saying the budget deficit could reach 3 percent of gross domestic product by the end of the year. Fernandez-Ansola also called on the government to keep the deficit at 1 to 1.5 percent of GDP.

Romania had a budget surplus of 0.3 percent of GDP for the first four months of the year, but the government is scheduled to make large payments later this year for compensations for assets confiscated by the former communist regime. The government has projected a deficit of 2.8 percent of GDP for the year.

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