IMF announces new loan tranche for Romania but criticizes infrastructure program, low gas price

International Monetary Fund ( IMF ) mission chief Jeffrey Franks gave the Romanian authorities a thumbs up during their fourth review. He also said that the Fund will disburse an additional EUR 505 million for the country. "Progress has been good, all quantitative targets were met and we agreed on the necessary policies,” said Franks. The macroeconomic evolution was better since the last visit to the country. The Fund anticipates a 2.5 percent economic growth for Romania in 2011, higher than initially expected, due to better exports, to the good agricultural year and the slow comeback in internal demand. "The eurozone will enter recession and this will be reflected in Romania as well. We anticipate a modest growth for 2012, of 1.5 to 2 percent, however, above the EU average," said Franks. The IMF mission chief criticized the National Infrastructure Development program, which does not include enough EU funding. He also mentioned that Romania offers natural gas to chemical producers at very low prices, helping them make huge profits. An IMF mission led by Franks arrived in Bucharest on January 25 for the fourth review of the standby arrangement with Romania. The IMF visit took place together with the European Commission and World Bank. The standby arrangement, worth EUR 3.56 billion, was approved on March 25, 2011 and entered into force on March 31, 2011. Alex Camburu, alex.camburu@romania-insider.com Additional reporting by Corina Saceanu, corina@romania-insider.com (photo source: IMF)