IMF Sees Romanian Salaries Up Along With Inflation In ’09-’11

Nominal wages in the public sector will grow by 5.1% in 2009, while in the private sector they are seen up 6.2%, according to IMF forecasts.

IMF estimates an average annual inflation of 5.9% in 2009, 3.9% in 2010 and 3.5% in 2011, down from 7.8% in 2008, the Fund said in a press release, published after the approval of the agreement with Romania.

Romania’s annual inflation rate will enter by the end of the year within the target set by the central bank for 2009 and will be at this level until end 2010.

For 2009, the central bank targets a 3.5% inflation, with a ±1 percentage point variation band around the target.

According to Romania’s agreement with the IMF, an inflation performance criteria was set for June and September, when the annual inflation will have to rank at 6.4% and 5.7%, respectively, with one percentage point variation band. At the end of 2009, the inflation rate has to be at 4.5%, and it has to fall to 2.5% by the end of 2010.

Romania agreed end-March with the International Monetary Fund, the E.U. and other international lenders a EUR19.95 billion financial package to help it cushion the effects of the financial crisis.

The the two-year stand-by agreement with Romania worth EUR12.95 billion was approved by the IMF’s Executive Board on Monday.