“Political risks to program implementation are rising as tension between the government and the president mounts in advance of elections later this year,” the report noted.
The IMF said the government could be tempted to lower taxes and increase spending at the budget revision in the summer. Additionally, “deeply entrenched vested interests” could push for reform delays.
“It will be difficult, but critical to undertake any new measures in a budget neutral manner,” IMF said.
The IMF last month completed its first two reviews of Romania’s progress under a EUR2 billion precautionary loan program and enabled the disbursement of a EUR436.3 million tranche to the eastern European country.
Available funds under the program reach EUR654.4 million so far.