The International Monetary Fund said Friday it would provide 3.3 billion dollars to Romania, part of a massive loan aimed at helping the EU member recover from a severe recession. The IMF, the World Bank and the European Union last May forged a rescue package of 20 billion euros (27.2 billion dollars) for Romania, hard hit by the global economic crisis.
The latest instalment brings to 12.6 billion dollars the money Romania has received under a 24-month loan, the Washington-based institution said in a statement. The IMF executive board completed reviews Friday of Romania's economic performance under the program, which allowed the "immediate disbursement" of the 3.32 billion dollars, the fund said.
John Lipsky, the IMF deputy managing director, said the Balkan country faces major fiscal challenges amid "a difficult political and economic environment." Lipsky noted that the deficit needed to be reduced to stabilise the ratio of public debt to economic output "and to comply with the criteria for accession to the euro area."
"The adjustment strategy entails politically difficult spending decisions and will require strong and steadfast implementation," he said. "Additional reforms to strengthen fiscal controls are crucial, including in expenditure commitments, contingent liabilities, and public entities outside the central government." The IMF projects the Romanian economy will grow 1.3 percent in 2010, after shrinking more than 7.0 percent last year.