Front Matter Page
© 2010 International Monetary Fund
September 2010
IMF Country Report No. 10/301
Romania—Fifth Review Under the Stand-By Arrangement, and Requests for Waiver of Nonobservance of Performance Criterion, and Request for Modification and Establishment of Performance Criteria—Staff Report; Supplementary Information; Press Release on the Executive Board Discussion; Statement by the Executive Director for Romania
The following documents have been released and are included in this package:
The staff report, prepared by a staff team of the IMF, following discussions that ended on August 4, 2010, with the officials of Romania on economic developments and policies. Based on information available at the time of these discussions, the staff report was completed on September 10, 2010. The views expressed in the staff report are those of the staff team and do not necessarily reflect the views of the Executive Board of the IMF.
Supplementary information of September 22, 2010.
Press Release summarizing the views of the Executive board as expressed during its September 24, 2010, discussion of the staff report that completed the review.
A statement by the Executive Director and Advisor to the Executive Director for Romania
The documents listed below will be separately released.
Letter of Intent sent to the IMF by the authorities of Romania*.
Technical memorandum of Understanding*.
*Also included in Staff Report
The policy of publication of staff reports and other documents allows for the deletion of market-sensitive information.
Copies of this report are available to the public from
International Monetary Fund • Publication Services
700 19th Street, N.W. • Washington, D.C. 20431
Telephone: (202) 623-7430 • Telefax: (202) 623-7201
E-mail: publications@imf.org• Internet: http://www.imf.org
International Monetary Fund
Washington, D.C.
Front Matter Page
INTERNATIONAL MONETARY FUND ROMANIA
Fifth Review Under the Stand-By Arrangement, Request for Waiver of Nonobservance of Performance Criterion, and Request for Modification and Establishment of Performance Criteria
Prepared by the European Department (In Consultation with Other Departments)
Approved by Poul M. Thomsen and Aasim Husain
September 10, 2010
Discussions: Discussions were held in Bucharest during July 24–August 5, 2010. The mission met with Prime Minister Boc, Finance Minister Vladescu, Central Bank Governor Isarescu and other senior officials, and representatives of labor and business organizations, and financial institutions. The staff team comprised J. Franks (head), A. Cebotari and M. Stierle (all EUR); F. Salman (SPR); F. Hasanov (FAD); L. Zanforlin and M. Dobler (MCM). T. Lybek (Resident Representative) assisted the mission. Discussions were held jointly with staff from the European Commission, the ECB and the World Bank.
Stand-By Arrangement: A 24 month, SDR 11.443 billion (€12.95 billion, US$17.07 billion, 1,110.77 percent of quota) Stand-By Arrangement was approved by the Executive Board on May 4, 2009 (Country Report No.09/183), and four purchases totaling SDR 9.031 billion have been made so far. The European Commission and the World Bank are also providing funds under the program. The sixth tranche amounting to SDR 769 million will be made available subject to the completion of this review.
Program status: The performance criteria and indicative targets for end-June 2010 have been met, with the exception of the criterion on general government arrears. Inflation remained within the inner band of the inflation consultation mechanism throughout the period. The end-September structural benchmark on reforming local government finances was completed ahead of schedule.
Key issues:The review focused on three issues: (i) the fiscal outlook for 2010–11 in light of the weaker economic prospects; (ii) implications of the recent VAT increase for the inflation outlook and monetary policy; and (iii) progress towards implementing agreed structural fiscal reforms.
Contents
I. Intoduction and Summary
II. Macroeconomic Developments and Outlook
A. Recent Develoopments
B. Revised Macroeconomic Framework
III. Policy Discussions
A. Fiscal Policies
B. Structural Reforms
C. Financial Sector Policies
D. Monetary and Exchange Rate Policies
IV. Program Modalities
V. Staff Appraisal
Boxes
1. Romania: Stand-By Arrangement
Figures
1. Recent Economic Trends
2. Financial Market Developments
3. Public Debt Sustainability: Bound Tests
4. External Debt Sustainability: Bound Tests
Tables
1. Quantitative Program Targets
2. Performance for Fifth Review and Proposed New Conditionality
3. Selected Economic and Social Indicators, 2007–15
4. Balance of Payments, 2007–11
5. Gross Financing Requirements, 2009–11
6. General Government Operations, 2007–11
7. Monetary Survey, 2007–11
8. Schedule of Reviews and Purchases
9. Indicators of Fund Credit, 2010–16
10. Public Sector Debt Sustainability Framework, 2005–15
11. External Debt Sustainability Framework, 2005–15
Appendices
I. Letter of Intent (LOI)
II. Technical Memorandum of Understanding
Front Matter Page
INTERNATIONAL MONETARY FUND ROMANIA
Prepared by the European Department
(In Consultation with Other Departments)
Approved by Poul M. Thomsen and Aasim Husain
September 22, 2010
Front Matter Page
Press Release No. 10/354
International Monetary Fund
FOR IMMEDIATE RELEASE
Washington, D.C. 20431 USA
September 24, 2010
Telephone 202-623-7100
Fax 202-623-6772
Front Matter Page
September 24, 2010
