Discussions with the delegation of the International Monetary Fund (IMF) will be finalised this week. Romanian authorities are still trying to persuade the Fund's representatives to accept the raise in the consolidated budget deficit to 4 percent of GDP, while inflation agreed upon might stand at 40-41 percent.
Finance minister Decebal Traian Remes told Ziarul Financiar that the final negotiations with the IMF mission might be held today. In her turn, Government spokeswoman Gabriela Vranceanu-Firea specified that the outcome of discussions would be presented today or tomorrow.
"Inflation will come to 40 or 41 percent, but deficit will stand at 3.5 percent and I think this is how negotiations will be finalised," Remes said. One week ago, the National Bank of Romania had estimated inflation to stand at 37-38 percent.
Negotiations with the IMF delegation, which started two weeks ago, referred to budget readjustment based on different indicators, since the inflation target was overshot and the leu/dollar exchange rate is 1,000 lei/dollar beyond the schedule.
On the other hand, Romanian authorities admitted that there have been delays in cutting down the number of employees within administration, as well as in reducing arrears.
Government advisor Lucian Croitoru stated that the level of the consolidated budget deficit that would be agreed upon with the IMF representatives also included the measures had in view for the restructuring of the pensions system and for pensions raises.
"We are drafting the budget now, and the deficit is of 3.5 percent; if we have the power, we must negotiate and persuade them so as to get 4 percent," Croitoru said. He added that the foreign loan Romanian authorities plan to contract "is not aimed at pensions, because money is odourless in the budget."
"A loan from the foreign market is absolutely necessary because it can downsize future costs, this is a test that can help us recover the credibility of financial policies," Croitoru stated.
The Finance minister also said that the state budget draft for the following year was another subject discussed during this round of negotiations with the foreign officials. "The budget on 2001 will be presented in Parliament in mid-October at the latest," Remes specified.
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