IMF reportedly says Romania shouldn’t go ahead with planned Pension Law

The International Monetary Fund (IMF) recommends Romania to amend the planned Pension Law because it has a negative budgetary impact, according to a draft version of the Article IV Consultation report leaked from government sources and quoted by Economedia.ro.

The report, to be published after last month’s mission of a Fund’s team in Bucharest, will reportedly include a paragraph emphasizing that the projection attached to the report does not include the expenses resulting from the application of the new pension law, estimated at approximately 0.5% of GDP in 2024, and an additional 1% of GDP starting in 2025.

Romania’s government has just endorsed the new Pension Law envisaging a 40% rise in the public pension envelope as of September 2024, but the junior ruling Liberal Party (PNL) issued a very reserved opinion and questioned the source of supplementary financing estimated at 3% of GDP.

Notably, the Liberals have under control the Finance Ministry (seemingly the source of the leaked document) while the Social Democrats are supervising the Labour Ministry – the author of the new Pension Law.

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