EBRD confident on Romania’s economic outlook

BUCHAREST (Reuters) – The European Bank for Reconstruction and Development is confident about Romania’s economic policy, which has recently come under international criticism, the bank’s president said yesterday. Speaking after meeting with top officials in Bucharest, Jean Lemierre said: «The prime minister made clear his views on fiscal policy. The central bank has taken action. These are key elements… I see no reason why I shouldn’t be confident,» Lemierre told a news conference. Some international observers, including rating agencies, and the central bank have said Romania’s government has not done enough to control domestic consumption, which is boosting inflation and overheating the economy. Earlier this week, the central bank and the government held talks to coordinate economic policy in a bid to safeguard the Romanian economy. The cabinet pledged to keep this year’s budget deficit to below the 2007 level, control wage increases and state spending ahead of parliamentary elections later in 2008, as well as ensure predictable spending patterns. Meanwhile, the bank raised interest rates by a full point, double what the market had expected, to 9 percent to counter inflationary pressures which it expects to bring annual price growth to more than 8 percent this quarter. «The economy is growing strong,» Lemierre said. «We see a strong banking sector… and a sound path for growth.»