Wednesday, May 20, 2009

Romania to keep IMF-agreed fiscal targets-FinMin

BUCHAREST, May 19 (Reuters) - Romania has no plans to ask for more lenient fiscal conditions from the International Monetary Fund even though it is struggling with recession, Finance Minister Gheorghe Pogea was quoted saying on Tuesday.
Pogea said budget conditions attached to a 20 billion euro aid package, led by the IMF and secured by Romania in March, were already lenient enough.

Romania's economy shrank by 6.4 percent on the year in the first quarter of 2009, more than double economists' forecasts, as the global crisis trampled consumption and manufacturing.

Pogea was speaking after the IMF and the European Commission allowed Hungary, the first emerging economy in the European Union to seek foreign help last year, to raise its budget deficit this year and next, averting further austerity measures.

Earlier this month, a senior IMF official said the Fund was prepared to ease fiscal conditions attached to its programmes with EU members Latvia, Hungary and Romania due to worsening economic downturns.

"The finance ministry has no reason to change macroeconomic indicators agreed with the IMF and will not ask ... to relax conditions agreed for the loan package," Pogea was quoted as saying by the daily Business Standard.
"We have some soft conditions imposed by the agreement with the IMF and we don't want to change them."

Under its agreement with foreign lenders, Romania plans to implement vast public sector reforms but was allowed to keep a budget deficit at 5.1 percent of gross domestic product (GDP) this year, barely smaller than in 2008 and far above EU limits. It cut spending by roughly 1 percent of GDP.

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