Romania risks missing its fiscal deficit goal, IMF warned

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The International Monetary Fund or IMF warned that Romania is at risk of missing the fiscal deficit goal.

IMF said that there is a risk that Romania will miss the budget deficit goal in 2018. The organization recommended that Romania should review their pension and wage hike plan.

Social Democrat’s government has not in an agreement with Fund since 2015. However, it targets the consolidated fiscal gap around 3% of the Gross Domestic Product (GDP).

The salary increases and consumption friendly pension rises by leftist brought inflation in Romania to the multi-year highs of approximately 5%.

Economists and financial analysts are expecting a 3.2% shortfall in 2018. However, the government revealed the plan last week to increase the minimum monthly wage to 2,080 leu ($503) from 1,900 leu.

In 2009, after the world financial crisis, Romania had to avail a bailout deal when the World Bank, the European Commission, and the IMF moved to rescue the Romanian economy. However, Romania did not avail the IMF loan in the subsequent years.

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