Banca Naţională a României

The IMF mission that visited Bucharest from January 25 to February 8 made considerable progress in its discussions with the Romanian authorities. The mission reached understandings on the key macroeconomic and financial objectives for 2005, including a 7 percent inflation target. The mission also reached broad understandings on the economic and financial policies needed to achieve these objectives, and prevent the risk of overheating resulting from macroeconomic imbalances that have emerged since late 2004. The government is to further specify the precise fiscal measures needed to bring down the budget deficit, including an appropriate tax and expenditure package, as well as concrete measures to cut losses in the state enterprises. Discussions on structural reforms concentrated on energy pricing policy, further progress with privatization, as well as visible steps to tackle corruption. The IMF staff remains in close contact with the authorities with a view to reach early agreement.