Romania: IMF Executive Board approves 1st review
Overview:The IMF Executive Board has approved the first review of the Stand-By Arrangement agreed in May allowing the disbursement of a tranche worth US$2.7 bn. In doing so, the Fund has commended the government’s implementation of the program to date and has loosened the fiscal deficit target to account for a much sharper than expected economic downturn. The government has remained stable despite the political unpopularity of its economic reform program centred, as it is, on reducing public sector wages and employment and reforming the pension system. The stability of the right-left coalition will inevitably be challenged further as it seeks to implement the rest of its economic program during a presidential election campaign where candidates of the coalition partners are competing against each other.