Furthermore, the unemployment rate could peak at 10 percent in Romania in the first half of 2010, the IMF mission chief, Jeffrey Franks, said in a The Money Channel show. “Unemployment is at eight percent, and will continue to rise in the first half of 2010. I would not be surprised if it reaches 10 percent in that period, before starting to drop,” Franks said.
“Because 2009 was more difficult than we expected, the effects will show in a wider deficit in 2010, unless other measures are taken. Without additional action, the budget deficit will amount to nine percent of GDP [gross domestic product],” Franks said. For this year, the government committed to meet a 7.3 percent of GDP budget deficit target, but this target will be missed and will widen to 7.8 percent, the IMF estimates.
The IMF does not exclude the possibility of delivering the third and fourth loan installments, worth a total €2.35 bln, together, in the event that political tensions lead to the next visit of the mission taking place at the end of January-early February, Franks said. “Our agreement states that assessments occur every three months. The review for the fourth tranche was initially scheduled for late January-early February 2010, and the money would have come on 15 March. In case the political situation is not resolved sooner, we could combine the reviews to grant Romania a double tranche release,” Franks indicated.
