Jeffrey Franks: Romania missing inflation target not to endanger IMF Accord

January 21, 2010

Bucharest, Jan 21 /Agerpres/ - 'Romania just slightly missed the inflation target, floating in the plus/minus one percent target, as provided by the Letter of intention addressed to the Fund', stated Jeffrey Franks, the head of IMF mission to Romania, on Thursday, at the end of negotiations with the National Bank Governor, Mugur Isarescu.

Missing inflation rate by a percentage point, within the IMF-convened margin, will have no consequence as for the programme implementation. Now we discuss transfer conditions for the third and fourth instalments and I consider that we have very good prospects, said Jeffrey Franks.

Head of the IMF mission to Romania also added that the Fund has an ambitious programme in Romania. IMF role is to aid the countries to attain the macro-economic stability in certain stages of their economic development, underlined Franks.

In the months to come, Romania will post a slight economic growth, but at the end of 2010 the recovery will be sensible, IMF official said.

Jeffrey Franks considers the budget deficit is more balanced and the Fund seeks more efficiency, namely better results with lower spending.

As regards Romania's decision to use all the 20 billion euros, borrowed from the international financiers, or to stop after the release of the third and the fourth instalments, is Romania's sovereign decision, said Jeffrey Franks.

The IMF, World Bank and European Commission delegation arrived on Wednesday in Bucharest to evaluate Romania's economic performance as reported to the Stand-by accord and has to draft an evaluation report based on which the IMF board will decide over Feb. 16-20 if it will grant to Romania two cumulated instalments in total value of 2.3 billion euros. Romania has to receive in addition one billion euros from the European Commission and, depending on the World Bank's approval, another approximately 300 million euros from the World Bank. AGERPRES

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