Finance Ministry and IMF take into account recession extension into 2010

After the over 7% decline in 2009, the economy could go down this year, as well. The tax hike threat seems increasingly more serious every day. The IMF no longer believes in intentions. The Government “finds out” there is not enough money collected to the budget.

The “fatidic” scenario of the row of negative revisions of the economic forecasts of 2009 is repeating in 2010: in the span of several weeks the Finance Ministry and the IMF moved from a 1.3% GDP growth estimate to merely 0.8%, only to start taking into account the second consecutive year of economic decline yesterday.

“The negative economic growth (i.e. the GDP decline) is one of the results of the analysis,” Finance Minister Sebastian Vladescu said after the conclusion of another round of talks held with the representatives of the IMF, of the European Commission and of the World Bank at the Finance Ministry yesterday, without revealing any figures, though.

Last month Vladescu expressed his reservations about the chances of an economic rebound this year, saying he was disappointed with the first quarter. As such, he said he hoped IMF’s second GDP growth forecast, 0.8% “will be verified by reality.”

After February statistics came out and confirmed the continuation of the decline in industry, constructions and retail, most bank analysts revised their expectations downwards, anticipating growth of 0.4 to 1% at most.

Finance Minister Sebastian Vladescu says nothing has been yet decided in the talks with the IMF about a potential modification of the budget target for this year, and the debates on tax hikes will be completed when the new letter of intent will be signed with the Fund to revise the stand-by agreement.