IMF Press Statement
23.03.2001
INTERNATIONAL MONETARY FUND
Office of the Resident Representative in Romania
National Bank of Romania, 25, Lipscani Street, Bucharest
Fax # (401) 312-0788 Tel # (401) 315-5026 Website: www.fmi.ro
PRESS STATEMENT
Mr. Neven Mates, head of the IMF mission that has just completed a visit to Romania, issued the following statement today:
"An IMF mission visited Romania during the period March 19-23 to hold discussions with the Government on some of the main macroeconomic policy issues, following up on the discussions held in February.
This time the discussions focused on the 2001 budget. In this context, with further evidence of economic activity picking up, the mission suggested that one of the priorities of fiscal policy should be to support the authorities’ disinflation effort, and recommended that the Government adopt a somewhat tighter fiscal stance in the 2001 budget. The mission also pointed out the importance of keeping the tax system stable, avoiding the introduction of distortionary tax incentives and increases in the tax burden on labor incomes. The mission will continue a dialogue with the authorities on these recommendations in the following months.
The mission also indicated to the authorities other issues that would be of importance in the coming discussions on a program that could be supported by an IMF arrangement. It stressed that the achievement of macroeconomic objectives in 2001 would depend on the improvement of financial discipline in public enterprises, including through an appropriate wage policy and efforts to reduce the widespread problem of arrears. The price policy in the energy sector should also be in line with market principles, particularly with a view to reducing the costs to the budget and improving efficiency in this sector. Finally, the mission drew the authorities’ attention to the need to proceed more expeditiously with the privatization process, and pointed out in this context the need to reach an agreement with the World Bank on PSAL II program.
The mission agreed with the authorities that the discussions would continue in the coming months. The mission also expressed its gratitude to the authorities for their hospitality and very good cooperation."
March 23, 2001
Office of the IMF Resident Representative
315-5026