“Your country deserves credit for taking steps over the past several years to begin chipping away at the barriers to higher growth,” Christine Lagarde told a conference held at the Romanian central bank during her two-day visit to Romania.
The IMF managing director praised the country’s energy prices liberalizing, the healthcare reforms and the macroeconomic stabilization process. In the space of three years, Romania reduced its budget deficit by more than 6% of GDP, and has exited the European Union’s excessive deficit procedure this year, Lagarde noted.
“There are however other reforms that can boost competitiveness and put Romania on a permanent path to higher and more inclusive growth,” Lagarde said, mentioning that state-owned companies need additional reforms to enhance viability.
Earlier Tuesday, Romania’s President Traian Basescu said, during a meeting with Lagarde, that Romania needs a new loan arrangement for two more years after it managed to successfully complete its second loan program with the IMF in June.
Lagarde ends Tuesday a two-day visit to Romania, and an IMF mission is scheduled to arrive in Bucharest Wednesday to discuss terms of a new agreement.
Romania and the IMF have signed a two-year EUR3.6 billion loan agreement in 2011, following the completion of a larger EUR13 billion deal secured in 2009. The agreement was supplemented by a EUR1.4 billion loan from the EU and another EUR1 billion from the World Bank. The country has not drawn any funds under the second program.