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IMF: We have clear signs growth is resuming. Consumption will rise as well

Autor: Mihaela Claudia Medrega

09.05.2011, 23:38 123

The IMF says the probability of recession returning to Romaniathis year is very low and expects economic results will confirm thereturn of growth.

In the last two years, the macroeconomic forecasts of the IMF,the NBR and the Government have not come true, so people are lesswilling to trust such forecasts.
"We can see clear signs of economic recovery and that growthis returning," Jeffrey Franks, chief of the IMF negotiatingmission, said at the end of the first review of the new loanarrangement, under which money is to be drawn only if the crisisreturns.

Although industrial production has been on a steady rise andexports are reaching historic highs, the low consumption is drivingthe economy down. But consumption will in turn rise, says the IMF.Franks has commended the "fiscal performance" and the fact that thedeficit has been kept within the agreed limits. But the bigchallenge comes next year, when the government will have tocontinue to cut the deficit towards 3% of GDP, i.e. 3.5-4.5 billioneuros from 4.4% of GDP this year. This deficit level is achieved bycutting investments, not paying arrears to the private sector, andby cutting employees in the public sector.

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