IMF Official: VAT Increase Up To Romanian Govt

Jeffrey Franks, chief of the IMF mission to Romania, said the authorities in Bucharest did not announce any plans to hike the VAT, and that such a decision should be carefully considered ahead.

On Monday, Franks said Romania’s economy is likely to touch a record low over the next three quarters, after which it should recover. The IMF official estimated a slight economic increase of 0.5%-1% in Romania next year.

The IMF, from which Romania secured a EUR12.95 billion two-year standby loan back in spring, has sent a mission to Bucharest for a first review on the country’s economic progress.

Romania, whose economy shrank at a faster pace than anticipated in the first quarter, obtained some leniency on its budget deficit this year, after the Fund accepted a higher cap of 7.3% on the GDP.

The initial deficit cap agreed upon was of 4.6%.