IMF after visit in Romania: Some issues remain outstanding, discussions to continue from Washington

The discussions between the International Monetary Fund and the Romanian authorities will continue from the fund’s headquarters in Washington, as some issues remain outstanding, reads a statement of the IMF. This comes after teams of the IMF and the European Commission visited Bucharest between June 2 and June 12, to conduct discussions on the third review under the IMF Stand-By Arrangement (SBA) and on the first review of Romania’s precautionary balance of payments program with the European Union. “The economy has continued to recover and is now expected to grow by 2.8 percent this year. Fiscal imbalances have been reduced and the current account deficit has remained low. Looking forward, the teams have had constructive discussions with the Romanian authorities on how to ensure further progress and have reached agreement on important policies in this regard,” reads the fund’s statement. “However, some issues remain outstanding. The discussions with the Romanian authorities will continue from respective headquarters”. The IMF board will postpone its review of the current stand-by agreement for Novemberthis year, after the Romanian Government and the IMF delegation didn’t reach a consensus on the reduction of the social security tax (CAS). However, the Romanian Prime Minister Victor Ponta recently said that the CAS will be cut by 5 percentage points from October 1, impacting the budget by RON 850 million (some EUR 190 million), without increasing the budget deficit. Irina Popescu, irina.popescu@romania-insider.com