Monday, May 18, 2009

Romania Plans to Tap Foreign Markets This Year, Dragoi Says

By Milda Seputyte

May 16 (Bloomberg) -- Romania plans to tap international markets in the second half, between the first two tranches of a loan from a group of lenders led by the International Monetary Fund, Deputy Finance Minister Bogdan Dragoi said.

The government plans to make the decision to borrow from foreign investors and prepare the legal framework this month for a bond sale as early as September, Dragoi said in an interview in London today.

Romania agreed last month to an international loan package led by the IMF and the European Union of 20 billion euros ($27 billion) to help finance its current account and budget deficits.

“Taking into account the insurance package we have, the reasons for confidence, we have a good story to tell to investors,” Dragoi said.

A 4 percent economic contraction forecast by the IMF may be smaller as the government aims to stimulate the economy through investment such as support to automakers and spending on infrastructure, he said. The economy is likely to start regaining growth in 2010, he said.

“What we believe, we’ll do better than” the 4 percent contraction, Dragoi said. “We have the ingredients to do better.”

Romania’s economy shrank a preliminary 2.6 percent in the first quarter, the first time since 1999 as lending and wage gains slowed, the Bucharest-based National Statistics Institute said yesterday.

To contact the reporter on this story: Milda Seputyte in Vilnius atmseputyte@bloomberg.net

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