IMF: Romania’s public salaries expenditure to be cut down to 2005 level

The salary expenses in the Romanian public sector will be cut in 2011 down to the 2005 level of 7.4 percent of gross domestic product, the International Monetary Fund (IMF) representative in Romania Tonny Lybek said at the Palace of Parliament on Tuesday. (in picture: R to L: Tonny Lybek and Jeffrey Franks, the head of the IMF mission to Romania) He stressed out that the Romanian economic program is backed by the IMF, the European Commission, the World Bank and other international financial institutions and expectations show Romania will enact the commitments made. Lybek said Romania is on the road to economic recovery as the foreign demand is picking up, after it had faced two shocks during the downturn - namely a lower foreign demand and slowed down capital inflows. The IMF representative said this crisis can be an opportunity for reform and stressed that while Bulgaria had recorded budget surplus during its times of economic growth, Romania had had a different behavior and the budget deficit had gone deeper, although the economic growth had been a record one. According to the commitments made by Romania to the international partners, the country's expenditure on pensions and other social aid should drop to 12.8 percent of GDP in 2011, down from 13.4 percent of GDP this year and 13 percent in 2009. The salary spending in the Romanian public sector has grown year after year since 2005, from 8 percent of GDP in 2006, to 9.5 percent of GDP in 2009; this spending is anticipated to go down to 8.2 percent of GDP this year. The IMF forecast for Romania points to an economic growth of 1.5 percent in 2011 and a budget deficit of 4.4 percent of GDP. AGERPRES (photo source: Agerpres)