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The Executive Board of IMF will assess today the consultations with Romania pursuant to Article IV of the Fund's statutes
The Executive Board of the International Monetary Fund (IMF) will assess on Wednesday, March 25, the consultations with Romania pursuant to Article IV of the Fund's statutes, according to the schedule published on the website of the international financial institution.
The periodical consultations as stipulated by the Article IV of the Fund's statutes represent a compulsory monitoring exercise that applies to all member states. The purpose of the consultations based on Article IV is to check into the financial and economic situation at national level and come up with general recommendations referring to the monetary, financial and economic policies that need to be followed in securing stability and a positive development at economic level.
The teams of the International Monetary Fund (IMF) and the European Commission (EC) visited Bucharest over January 27 - February 10, 2015, to continue talks about the third control mission under the Precautionary Stand-By Agreement with the IMF and the first control mission as part of the Romania's precautionary balance of payments programme with the European Union.
The missions were conducted as part of the periodical consultations (usually taking place on an annual basis) pursuant to Article IV of the IMF Statutes, in the context of a request to use IMF resources (loan from the IMF), as part of the discussions of programmes under the monitoring by experts, as part of other forms of monitoring by experts of the economic development.
In the final declaration after IMF's mission on Article IV of 2015, the IMF experts estimated that the Gross Domestic Product (GDP) of Romania will increase by 2.7 per cent this year and by 2.9 per cent in 2016, while the main factor at the grounds of this evolution will be the consolidation of the private consumption due to the significant increase in the real salary, low prices for oil and some interest rates that have come to record low levels.
Moreover, the IMF mentioned that the Romanian economy has been able to correct more of its internal and external imbalances through a combination of strong macroeconomic policies. However, Romania is still vulnerable to external shocks, while the balances remedy remains incomplete.
On the other hand, the international financial institutions showed that Romania should resume its process of deregulation of gas prices for the domestic consumers, by ensuring at the same time an additional aid for vulnerable consumers.
In what the banking sector is concerned, the International Monetary Fund pleaded for a bilateral voluntary restructuring of credits in Swiss francs, while considering the reimbursement capacity of the loan by the borrower. Moreover, the IMF experts recommend the National Bank of Romania (BNR) cap foreign exchange intervention and maintain a prudent attitude with a moderate accumulation of reserves.