(Finance) – The Central Bank of Romania it should not lower the interest rate official until headline and core inflation are on a firm downward path and on track to reach the 2.5% target tolerance band in a timely manner. This is stated by International Monetary Fund (IMF) after a mission to the country, highlighting upside risks to inflation from strong wage growth and a positive fiscal impulse in 2024.
According to the IMF, the fiscal deficit – expected at 6% or more – will have to fall below 3% of GDP in the medium term to stabilize public debt, ensure accessible market financing and support the continued disbursement of EU funds. Last year’s fiscal package was a step in the right direction, but “more needs to be done,” it said in a statement.