Romania Economy Facing Severe Recession - IMF

London 10 August 2009 - The International Monetary Fund has forecast an 8.5% contraction in the Romanian economy this year, following a major study into the country's economic performance under its two-year loan program.

The IMF loaned Romania 12.5mln Euros in March to help them deal with the effects of the global slowdown, and stipulated a comprehensive package of economic reforms in Romania. The findings of the review will determine how a second portion of financial assistance totalling 1.25billion Euros will be distributed after September.

Romania's economy has already contracted 6.2% in the first quarter of the year compared to the same period last year.

After staying in the country from Jul 29 to Aug 10 the IMF has advised that Bulgaria should cut fiscal spending by 1% this year to reign in its spiralling budget deficit, which is expected to stand at 5.5% this year.