A European Commission (EC) and International Monetary Fund (IMF) joint team estimates that Romania has met all performance criteria set for late June, the Romanian authorities implementing the policies in the program, according to the EC and IMF release on the evaluation mission in Romania.

For 2011 a GDP growth of around 1.5 percent is expected, while in 2012, the team forecasts a growth of 3.5 to 4 percent, depending on the growing domestic demand, including better absorption of EU structural funds. Also, it is anticipated that the inflation will decrease, but will remain above the inflation target for 2011 set by the Romanian National Bank, estimating a decline of 3.5 percent in 2012.

In 2011, Romania meets the budget deficit target of 4.4 percent of GDP (in cash terms), and less than 5 percent of GDP in terms of commitments (ESA), shows the EC and IMF release on the evaluation mission in Romania. In the first semester, Romania’s VAT and excise revenues have exceeded estimates, but the non-tax revenues were disappointing. The Romanian Government remains committed to reduce the general government deficit below 3 percent by 2012, in terms of both cash and in terms of commitments. Better revenue collection, cost optimization, including better targeting of social assistance to poor and vulnerable in society, stringent control of spending and other measures will be essential to achieve the objective, is pointed in the IMF and EC release.

Teams of experts from the European Commission (EC) and International Monetary Fund (IMF) have visited Bucharest from July 20 to August 1, for the quarterly evaluation of Romania's economic program to strengthen economic growth, while maintaining macroeconomic and financial stability. The next review of the program is scheduled for late October - early November, 2011.

Irina Popescu, irina.popescu@romania-insider.com