The International Monetary Fund has revised the forecast of the economic growth of Romania in 2025, to 1%, from 1.6% in previous estimates, and to 1.4% for 2026, considering that accelerating the investments financed through the Next Generation program will partially compensate for the private consumption caused by inflation and the effects of fiscal consolidation. «The Government has introduced a large package of tax reforms for the period 2025-2026, which includes increases in standard and reduced VAT quotas, as well as continuing the freezing of salaries in the public sector and pensions in 2026. It is expected that the total inflation will remain in the next 12 months, before re -tolerance of the NBR,» in the statement issued by the background following the visit to Romania. The head of the mission of the International Monetary Fund (IMF) for Romania, Joong Shik Kang, was on a visit to our country these days. The IMF believes that the economy will gradually increase in the context of fiscal consolidation, essential to stop the growth of twin deficits. Inflation will remain temporarily high, before re -entering the BNR tolerance until the end of 2026:Fiscal policy: The recent package of reforms for the period 2025–2026, which also includes fiscal reforms, is welcome and represents an important step before. Its complete implementation and additional adjustment measures starting with 2027, to reduce the tax deficit below 3% of GDP, are essential for restoring tax and macroeconomic sustainability.Monetary policy: The prudent approach of the NBR remains adequate, and the interest rate discounts should only be resumed after inflation will enter a firm descending trend. Higher flexibility of the medium -term exchange rate would strengthen shock resilience.Structural policies: The advancement of structural reforms, including increasing the efficiency of the state, is crucial for the complete capitalization of European funds and supporting the economic growth in the context of the necessary fiscal adjustment. The IMF points out that the retrograde of the Sovereign credit rating remains a risk, as concerns about the implementation of the planning fiscal consolidation for 2025-2026 and the medium -term sustainability of public finances, given the still high fiscal deficit. In addition, a slower economic growth among the main trading partners – possibly combined with higher commercial barriers, uncertainty and intensification of regional conflicts – could adversely affect the trade and flows of foreign direct investment. On the other hand, a firm implementation of fiscal adjustment and investment projects financed from European funds could strengthen investor confidence and reduce faster risk premiums than expected, which would lead to increased private investments and economy. Inflation risks include higher energy prices and adverse climatic shocks that affect food prices. An increase in wages above expectations, possibly determined by the high temporary level of total inflation, could delay the forecast normalization of the basic inflation. Regarding the budget deficit, the IMF considers that if the reform package will be applied in full the primary fiscal deficit can descend by approximately 1¼ and 2 percentage points from GDP in 2025 and 2026, which would restrict the total fiscal deficit to about 6% of GDP in 2026. However, the fiscal deficit will only be reduced to about 5%. While the public debt related to GDP will continue to grow, approaching 70%. «Additional tax adjustments of approximately ⅔ percentage points in GDP per year are required, on average, starting with 2027, to continue to reduce the deficit below 3% of GDP in the medium term and to stabilize the public debt around the level of 60%. The anticipated specification of concrete measures, with application starting from 2027, would contribute to the restoration of the credibility, Planning households and companies and improving the investment climate ”, the statement said.
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