Finance minister Tanczos Barna denied rumors related to tax rate hikes or other austerity measures suggested by the expert team of the International Monetary Fund (IMF) currently (February 3-7) in Romania under a 'routine' visit to assess the country's economy, Hotnews.ro reported. 

There is a consensus among independent analysts that further corrective fiscal measures of a magnitude of 0.8%-1.0% of GDP are needed for the government to meet the 7.0%-of-GDP deficit target this year. However, such a target can be achieved by moderate measures that do not necessarily require major tax rate hikes or austerity policies. 

Under normal conditions, the government should be able to observe the budget planning for this year, minister Tanczos assured, admitting that the public administration should indeed demonstrate tight discipline (as opposed to previous years) in sticking with the budget on the expenditures side.

He specifically said no VAT rate hike is envisaged, responding to a vocal warning voiced by the employers' association Concordia on the same day.

"We reaffirmed our commitment to reduce the budget deficit and create a leaner state in the next seven years, increasing the budget for investments that support the economy. We agreed that Romania must regain the trust of international partners and investors, and this is only possible by observing the commitments and by securing fiscal stability and predictability," said the Romanian minister.

iulian@romania-insider.com

(Photo source: Inquam Photos/George Calin)