Isarescu: Keep the targets in mind

Romania must continue to apply economic policies in order to reach its targets, even though results may not be spectacular and there may be pressures from those disgruntled, says the National Bank of Romania Governor Mugur Isarescu.
“We are lagging behind in terms of inflation and structural reforms, but we are now making up for the delays posted in the past years and in the ’90s. Reform must continue because it is difficult for economic policies to gain credibility. We should persevere with these policies (because the ultimate goal is to reach our targets) and consolidate what we have built,” Isarescu said.
According to the NBR Governor, Romania has met the terms of the IMF and WB agreements since 2000 and the economic programme for EU pre-accession since 2001.
“Structural reform proved a little sluggish,” Isarescu stated.
The NBR official stands by the initial forecasts for this year’s economic indicators. Thus, Romania is heading for 5.2% growth in 2003, mainly supported by exports and investments and also by consumption, in the second half of the year.
As for inflation, Isarescu forecasts a slight departure from the 13-14% target calculated December-on-December. “We need to wait for the summer signs, to see the potential effects of the salary policies and the restructuring strategies,” Isarescu said.
The National Bank of Romania estimates inflation will amount to 9% in 2004 and 7% in 2005.
In other news, the National Bank is not planning to keep the same growth pace for the foreign currency reserve as last year (when it increased by $2bn), but the reserve is estimated to follow the pace of exports and climb 10 percent.
“I feel the foreign currency reserve will be $700-800m higher by yearend as compared to last year. This does not mean we shall not buy from the forex market (which will probably happen mostly in the summer), as the public debt service revolves around 2 billion dollars,” Isarescu said yesterday.
Romania’s foreign currency reserves amount to some six billion euros.