IMF国际货币组织全球-Romania_2019-Article-IV-Consultation_81页_15mb

Romania: 2019 Article IV Consultation Summary

Core Content

The 2019 Article IV consultation with Romania, conducted by the International Monetary Fund (IMF), highlighted both the country's strong economic performance and growing macroeconomic imbalances. The consultation included a Press Release, Staff Report, Staff Supplement, and a Statement by the Executive Director, all of which were made public on August 28, 2019.

Main Views and Key Information

Economic Performance

• Growth: Romania experienced strong economic growth in 2018, with real GDP growth at 4.1% and a projected 4.0% for 2019. The output gap remained positive, indicating the economy was operating above potential.
• Unemployment: Unemployment reached record lows, with a rate of 4.2% in 2018 and 4.3% in early 2019.
• Inflation: Inflation pressures increased, with headline inflation exceeding the National Bank of Romania's (NBR) target band since February 2019. Core inflation also rose above 3% in April 2019.
• Fiscal Deficit: The fiscal deficit widened to 2.8% of GDP in 2018, with a projected increase to 3.7% in 2019. The structural fiscal balance worsened to -4.1% of GDP.
• Current Account Deficit: The current account deficit reached 4.5% of GDP in 2018, the highest in the EU, driven by strong import growth and a weak export performance. It is expected to remain above 5% of GDP in 2019–2020.
• Public Debt: Public debt (including guarantees) reached 37.4% of GDP in 2019, with a moderate level of government debt and reserves.

Risks and Imbalances

• Domestic Risks: The risk of increased vulnerability from policy shocks, such as further fiscal stimulus or regression on structural reforms, is a concern. The new pension law may pose a medium-term risk to fiscal sustainability.
• External Risks: A sharper-than-expected external slowdown could worsen the current account deficit and increase financing pressures. A global financial tightening could lead to capital outflows and higher borrowing costs, especially if aligned with domestic policy shocks.

Policy Recommendations

• Fiscal Policy: Implement durable fiscal consolidation with high-quality measures to reduce the twin deficits and improve the macroeconomic policy mix. Shift expenditures from rigid spending (wages, pensions) to investment. Modernize revenue administration and improve expenditure efficiency.
• Monetary Policy: Tighten monetary policy to address inflation pressures and anchor inflation expectations. Allow greater exchange rate flexibility to absorb external shocks.
• Financial Sector: Maintain prudent financial regulation and reassess the new bank tax and interbank transactions-based reference rate to avoid market distortions. Continue the implementation of the 2018 Financial Sector Assessment Program (FSAP) recommendations.
• Structural Reforms: Strengthen public investment management and governance of state-owned enterprises (SOEs) to better absorb EU funds and improve infrastructure. Align wage policies with productivity gains and renew efforts against corruption to enhance competitiveness and attract investment.

Key Economic Indicators (2017–2019)

Authorities' Views

• The Romanian authorities projected GDP growth to be stronger than the IMF's, estimating 5.5% for 2019 and over 5% in the medium term.
• They emphasized the importance of rebuilding buffers and expressed confidence in the economy's resilience to external shocks.
• The new pension law was seen as a significant fiscal risk, and they acknowledged the need for a comprehensive review to balance social, equity, and investment needs.
• The authorities noted that the EBA-lite model underestimated the cyclical and structural factors contributing to the current account deficit in 2018 and believed the leu was broadly in line with fundamentals.

Conclusion

The IMF Executive Board welcomed the strong economic growth and low unemployment in Romania but raised concerns about the widening fiscal and current account deficits, rising inflation, and stalled structural reforms. They recommended a shift towards countercyclical fiscal policy, tighter monetary policy, greater exchange rate flexibility, and renewed structural reforms to ensure sustainable growth and convergence with EU income levels. The report also emphasized the need for improved policy predictability and financial sector resilience.