Romania this year will conclude a new stand-by agreement with the International Monetary Fund, but it will not be done any sooner than this fall. “It is technically impossible to have the agreement signed any sooner than this fall; one thing is for sure though: we will have a new agreement with the IMF by the end of the year.
The main problem in our talks with the IMF is the credibility,” Mugur Isarescu, National Bank of Romania governor, said at the end of last week.
Romanian authorities have to convince the IMF delegation that the decline in inflation will be possible to attain alongside with the anticipated economic growth, a target attained by Poland and Hungary, but missed in Bulgaria, which had to resort to harsh measures (i.e. Currency Board), according to the governor.
“Economic growth and inflation are not necessarily compatible, although they do not conflict, either. We have to show that our programme will actually be turned into effect. The Government will draft 2002’s budget by this fall and discuss it with the IMF experts.
We are discussing the entire set of measures we are to promote to curb inflation and boost economic growth,” Isarescu added. He says Romania over the next three years will register 4-6% growth, which must not be pushed so as not to upset the economic balance.
The IMF Negotiator for Romania, Neven Mates, arrived in Bucharest early last week to discuss with the Romanian authorities about drafting a memo of understanding to sign a new stand-by agreement.