IMF completes Romanian review. Is the money coming in September?

The IMF, the European Commission, and the World Bank have completed the review of Romania’s economic performances in the first half of the year, and the new macroeconomic forecasts for 2011, with conclusions of talks with the Romanian authorities to be announced today in a press conference.

The release of the around 900 million-euro tranche of the stand-by arrangement with Romania depends on the conclusions of the review. Although the target set as regards the state’s arrears to companies has been, as usual, missed, the release of the tranche in the second half of September appears to be quite certain.
Economic growth, fiscal policy, structural reforms, the state of the financial sector, and monetary policy are some of the topics discussed by the Romanian authorities with the IMF.

While this year will quite certainly see economic recession deepen, 2011 estimates appear quite upbeat.
After the economy fell by 7.1% in 2009, this year’s contraction is expected to be 1.7-1.0%, whilst the draft budget discussed with the IMF provides for a 1.5-2% GDP rise, as announced by Finance Minister Sebastian Vl`descu. It remains to be seen if the economic progression will contradict the optimism of the authorities and of the international financial institutions, as has been the case this year.