The International Monetary Fund (IMF) has begun its visit to Bucharest, meeting with representatives of the Romanian government to analyze the country’s economic developments and update its forecasts. Led by Jan Kees Martijn, the IMF mission will be in Bucharest until November 8, Ziarul Financiar reported. 

During this visit, the IMF team will assess recent economic and financial trends and revise Romania’s macroeconomic outlook. Currently, the IMF forecasts economic growth of only 1.9% for Romania in 2024. 

This visit comes at a challenging time for Romania’s finances, as the budget deficit is anticipated to exceed 7% of GDP, spending is increasing at double-digit rates, and economic growth is slowing.

In its latest report, the IMF advised Romania to implement several fiscal reforms to address the budget deficit. 

Among its recommendations, the IMF criticized the recently introduced turnover tax and proposed a shift to a progressive income tax system. The Fund noted that Romania’s tax revenue is significantly lower than that of comparable countries, which constrains its ability to fund public services to EU standards, necessitating substantial tax policy reforms.

Additionally, the IMF recommended VAT reform, advocating for better collection processes, a reassessment of some reduced VAT rates, and an increase in property taxes.

iulian@romania-insider.com

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