“Structural reforms are needed to accelerate growth, but political will is waning. We hope for further pressure from the IMF, since a third agreement could come only after fulfilling further provisions from the second loan deal,” the bank said in its latest quarterly CEE report.
UniCredit estimates Romania’s economy will stagnate in 2012 and will grow at an annualized rate of less than 2% over the next two years.
“After three years of successful fiscal adjustment, growth remains Romania’s biggest challenge. However, with domestic demand hit by austerity, a poor harvest and faltering exports amid weak economic activity in the EU, the country faces stagnation over the coming quarters,” the report noted.
Faster growth will depend on further structural reforms and better EU fund absorption, the Italian bank said.
Romania plans to obtain a new loan agreement with the IMF once its existing EUR3.6 billion deal ends in 2013. The government didn’t say how much it hopes to secure under the follow-up deal.
In April 2011, Romania and the IMF signed two-year a precautionary loan agreement, successor to a larger EUR20 billion international bailout package received during 2009-2011.