IMF delegation arrives today

The delegation of IMF experts is expected in Bucharest today in order to carry a new round of discussions with the Romanian authorities.

The head of the IMF delegation for Romania, Neven Mates, is to arrive in Romania at the end of this week, Stephane Cosse, IMF resident representative, said. The visit precedes the “successful” finalisation of negotiations with the World Bank regarding PSAL II.

“The IMF delegation will continue the talks with Romanian authorities, which began during its February-March visit, and hopes to conclude a possible stand-by loan agreement,” Cosse stated.

The main discussion topic will focus on finding efficient solutions to support the effort for a durable inflation cut. Under such circumstances, IMF representatives would like to hear the Government explain the steady increase of arrears, since they bear an impact on the inflation rate. The Finance Ministry is planning to present a package of measures to finally solve the situation.

On the other hand, the IMF will again insist on the salary policy control, especially in the public sector, given its importance in any strategy to cut the inflation rate.

The delegation will assess the economic evolution over the past two months in order to see if the goal of 4% economic growth may be reached this year.

IMF experts will attempt to identify the factors sustaining a sound economic growth and not an artificial one, based on subsidies granted to state-owned companies and on arrears.

The discussions focussed on 2001 budget draft over the March 19-23 visit. IMF representatives considered that, though there were clear signs of economic growth, sustaining the disinflation measures should be one of the fiscal policy priorities.

IMF representatives also stressed on the issue of arrears expansion in the economy and prompted the Romanian authorities to “move faster” in the privatisation process.