IMF: Romania May Raise Salaries, Pensions Slightly In 2012, If Things Go Well

Romania's Government has agreed with the IMF and EC to freeze public sector salaries and pensions, but to increase them slightly halfway through next year, if budget revenue allows, said IMF mission chief Jeffrey Franks.

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Franks pointed out that any pension raise will be modest, likely equivalent to the rate of inflation.

The central bank's estimate for inflation is 3.3% this year and 3% in 2012.

Franks also said an IMF delegation will come to Romania in April to discuss the budget's evolution in the first quarter with the authorities. If projections indicate the budget will have room for income raises in 2012, the Government may decide to raise salaries later in the year.

He added that the law of fiscal responsibility does not permit such decisions in the six months before elections, but the Government may decide to raise salaries and pensions in May and implement them two months later.

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