Foreign investment in Romania could see a decline if the political instability does not remain lower than in the other countries of the region, the regional representative of the International Monetary Fund (IMF), Juan Fernandez Ansola said yesterday.
He also said a coalition government can generate certain confusion between partners, which should not, however, continue in the long-term future.
The IMF representative for Romania and Bulgaria said the situation is still being maintained within normal limits, and the IMF team visiting Romania next week, to have discussions with the state authorities, will make a more detailed investigation. Romania's economic growth will maintain a high level this year, namely 6.5%, but inflation will exceed the target set by the National Bank, while the current account deficit will continue to remain high, Ansola stated.
He also pointed out that these were only preliminary estimates, but conclusions will be drawn by the IMF team visiting Romania between February 21 - March 7, for the annual macroeconomic consultations with the authorities from Bucharest.
Romania's economic growth stood at approximately 8% last year, according to the official estimates. The inflation rate dropped from 8.6% to 4.87%, while the central bank has set a 4% target for this year, with a variation interval of one percentage point.
The last time when the IMF experts paid a visit to Romania was in October 2006. Negotiations regarding the prolongation of the agreement signed with the IMF in July 2004 fell through in October 2005, after the Romanian authorities rejected the requests made by the international financial institution.
IMF has criticised the budgetary policy adopted by the Romanian authorities and demanded that steps to increase revenues and cut expenses should be taken, so as to reduce the budget deficit.
The stand-by agreement officially ended on July 7, 2006, and the relationship between Romania and the IMF continues through current collaborations with the financial institution's experts.
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