TUESDAY,
OCTOBER 10, 2006
BUCHAREST, Romania The International
Monetary Fund urged Romania to cut its budget deficit and keep public sector
wages under control to ensure economic stability, officials said
Tuesday.
The world financial body's negotiator for Romania, Emmanuel van der Mensbrugghe said that while Romania's economy is growing at more than 7 percent this year, and inflation has been falling, the IMF is concerned about the country's growing current account deficit.
He urged the government to balance the budget next year and keep the 2006 budget deficit to under 1 percent, while continuing measures to reduce inflation.
"It is essential to strengthen efforts to ensure macroeconomic stability," he said.
Mensbrugghe met with President Traian Basescu and Prime Minister Calin Popescu Tariceanu to discuss the country's policies.
"While this year there were no problems in financing the current account deficit because of incoming direct foreign investment and privatizations, in the future there could be difficulties in financing this deficit," the president's office said in a statement about the meeting.
With many Romanians buying imported cars and appliances, the country's trade deficit reached a record €8.43 billion (US$10.7 billion) over the first eight months of the year, almost 44 percent higher than over the same period in 2005.
The government is forecasting a budget deficit of more than 2.5 percent in 2006, and intends to spend heavily in 2007 to fund improvements in education, health care and infrastructure.
The Cabinet has pledged to keep public wages under control, but has come under pressure in recent weeks from unions demanding steep wage increases.
The main ruling Liberal Party decided Tuesday to support a 2.8 percent budget deficit in 2007, with its Finance Minister Sebastian Vladescu predicting a 4.5 percent inflation and 6.4 percent gross domestic product growth for next year.
Romania's IMF standby agreement was suspended last November over disagreements on the 2006 budget, taxation and monetary policies.
The world financial body's negotiator for Romania, Emmanuel van der Mensbrugghe said that while Romania's economy is growing at more than 7 percent this year, and inflation has been falling, the IMF is concerned about the country's growing current account deficit.
He urged the government to balance the budget next year and keep the 2006 budget deficit to under 1 percent, while continuing measures to reduce inflation.
"It is essential to strengthen efforts to ensure macroeconomic stability," he said.
Mensbrugghe met with President Traian Basescu and Prime Minister Calin Popescu Tariceanu to discuss the country's policies.
"While this year there were no problems in financing the current account deficit because of incoming direct foreign investment and privatizations, in the future there could be difficulties in financing this deficit," the president's office said in a statement about the meeting.
With many Romanians buying imported cars and appliances, the country's trade deficit reached a record €8.43 billion (US$10.7 billion) over the first eight months of the year, almost 44 percent higher than over the same period in 2005.
The government is forecasting a budget deficit of more than 2.5 percent in 2006, and intends to spend heavily in 2007 to fund improvements in education, health care and infrastructure.
The Cabinet has pledged to keep public wages under control, but has come under pressure in recent weeks from unions demanding steep wage increases.
The main ruling Liberal Party decided Tuesday to support a 2.8 percent budget deficit in 2007, with its Finance Minister Sebastian Vladescu predicting a 4.5 percent inflation and 6.4 percent gross domestic product growth for next year.
Romania's IMF standby agreement was suspended last November over disagreements on the 2006 budget, taxation and monetary policies.
----------------------------
Vali
An aristocratic title is not enough to ensure a noble behaviour. A person's greatness comes from acknowledging the mistakes and agreeing to correct them.
"When the power of love overcomes the love of power, the world will know peace." (Jimi Hendrix)
*** sustineti [romania_eu_list] prin 2% din impozitul pe 2005 - detalii la http://www.doilasuta.ro ***
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