WB: Multilateral Loan Recommended For Romania’s Budget Needs

Catalin Pauna, chief economist with the World Bank’s office in Romania, said the international institution is concerned about the country’s progress in the fiscal sector.

The authorities in Bucharest must convince the markets that its deficit-reducing program unfolds as scheduled, Pauna said.

The lack of fiscal adjustments is one of the reasons Romania is among the last states to resume economic growth, he added.

„I believe that several factors contribute to this (to the delayed economic growth). Romania had one of the largest budget deficits in Europe, and this let little room for policies aimed at relaunching the economy,” Pauna said.

Still, Pauna voiced confidence that Romanian economy will see positive economic growth in 2011, supported by bigger exports.

Last year, Romania secured EUR20 billion in foreign aid from the International Monetary Fund, the World Bank and other lenders to cushion the effects of the recession.

Joint teams from the IMF, EU and the World Bank are due to arrive in Bucharest on July 26 for a new review of Romania’s progress under the agreement.