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Baqir (IMF): Recent evolutions may cancel progress recorded by Romania in macroeconomic stability
Romania recorded impressive evolutions following the financial crisis, especially in macroeconomic stability and the reduction of current account deficit and budget deficit, said Reza Baqir, the head of IMF mission for Romania.
However, on the background of recent evolutions, these gains risk to be cancelled, the IMF official warns.
There are fears that the present good financing conditions enjoyed by Romania and the previous progress recorded in adopting reforms may disappear or be cancelled. Romania also risks to jeopardise the goodwill shown by investors, Reza Baqir said.
He recommends to postpone measures of fiscal relaxation to come into force in 2017 for the reduction of budget deficit (from 2.5% of GDP this year, to 2% in 2017 and 1.5% in 2018).
The IMF official asks Romanian authorities to remain transparent in public finances and to grant priority to big investment projects. Romania should also continue structural reforms needed to improve investments in the public and private sectors and to increase the growth potential of the economy.
Baqir considers that progress has been made in the field of improving corporate management of state enterprises, but restructuring of those which have been having problems and waste money from the budget should continue. IMF experts say that reforms will help improve management professionalism in state enterprises and reallocate resources, will increase profitability and reduce subsidies.