{
  "title": "IMF Survey: Romania Receives Support from IMF to Counter Crisis",
  "publication": "IMF News, May 4, 2009",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/soint050409a",
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  "summary": "After several years of strong growth, Romania was hit hard last year by the global economic downturn and approached the IMF for a loan. IMF mission chief Jeffrey Franks talks about Romania’s economic challenges and the goals of its IMF-supported program.",
  "publishDate": "2009-05-04",
  "sections": [
    {
      "heading": "Economic background and crisis dynamics",
      "content": "- Romania experienced very strong growth until 2008: GDP growth averaged over 6½ percent per year from 2003 to 2008.\n- Growth turned sharply negative in late 2008: growth slowed from an average of 9 percent during the first three quarters of 2008 to a 13 percent decline in the fourth quarter.\n- Key domestic vulnerabilities:\n  - Large current account deficit as imports outstripped exports.\n  - Heavy dependence on foreign capital inflows and foreign direct investment, including foreign banks’ subsidiaries.\n  - Rapid increase in private sector borrowing, with over half of domestic private credit in foreign currency.\n- External shock transmission:\n  - Global credit crunch reduced capital inflows.\n  - The leu depreciated by more than 15 percent against the euro since October 2008, raising the cost of servicing foreign-currency loans for consumers and companies.\n- Resulting effects: output is falling, exports have dropped sharply, and large capital inflows that financed the boom have dwindled."
    },
    {
      "heading": "Reasons for seeking IMF support",
      "content": "- Combined pressures from the worldwide slump and Romania’s internal economic weaknesses left limited policy space:\n  - Large pre-crisis fiscal deficits reduced maneuverability during the downturn.\n  - Reforms to improve productivity and flexibility had stalled.\n- Romanian authorities sought a comprehensive policy package to bolster resilience as regional conditions worsened.\n- Multilateral support: In March (2009), the IMF, together with the European Union, the World Bank, and other multilateral organizations, committed to supporting the authorities’ efforts."
    },
    {
      "heading": "IMF program approval, size, and objectives",
      "content": "- Timeline and approvals:\n  - IMF Survey online: May 4, 2009.\n  - IMF’s Executive Board approved a Stand-By Arrangement in the amount of $17.1 billion (noted separately).\n  - The IMF’s Executive Board has approved a 24-month Stand-By Arrangement for €12.95 billion as part of a total €20 billion financial support package.\n- Program aims:\n  - Help cushion the effects of the downturn through financial support.\n  - Support policy changes to avoid the worst consequences of the crisis.\n- Three main program areas:\n  - Fiscal consolidation.\n  - Banking reform.\n  - Reducing inflation to help restore financial stability."
    },
    {
      "heading": "Key statistics and figures (preserved exactly)",
      "content": "- $17.1 billion (Stand-By Arrangement amount noted).\n- 24-month Stand-By Arrangement for €12.95 billion.\n- Part of a total €20 billion financial support package.\n- GDP growth averaged over 6½ percent per year from 2003 to 2008.\n- Average of 9 percent growth during the first three quarters of 2008.\n- 13 percent decline in the fourth quarter of 2008.\n- Leu depreciation of more than 15 percent against the euro since October 2008.\n- Over half of domestic private credit is in foreign currency.\n\nIMF Survey online: May 4, 2009 — Interview with Jeffrey Franks, IMF mission chief for Romania.\n\n---\n\n\n References\n\n- https://www.imf.org/en/News/country-focus\n- PRESS CENTER\n- IMF Survey Interview\n- Watch the video in English\n- Watch the video in Romanian\n- Press release\n- IMF Board assessment\n- IMF outlines Romania loan plan\n- Romania and the IMF\n- Key issues: emerging markets\n- Emerging markets face pressure\n- IMF helps emerging Europe\n- Emerging market currency risk\n- Emerging Europe’s income gap\n- IMF’s emerging market loans\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/soint050409a"
    }
  ],
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    "[Markdown version](/en/news/articles/2015/09/28/04/53/soint050409a/index.md)",
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    "Published: May 4, 2009",
    "Romania experienced very strong growth until 2008: GDP growth averaged over 6½ percent per year from 2003 to 2008.",
    "Growth turned sharply negative in late 2008: growth slowed from an average of 9 percent during the first three quarters of 2008 to a 13 percent decline in the fourth quarter.",
    "Key domestic vulnerabilities:",
    "External shock transmission:",
    "Resulting effects: output is falling, exports have dropped sharply, and large capital inflows that financed the boom have dwindled.",
    "Combined pressures from the worldwide slump and Romania’s internal economic weaknesses left limited policy space:",
    "Romanian authorities sought a comprehensive policy package to bolster resilience as regional conditions worsened.",
    "Multilateral support: In March (2009), the IMF, together with the European Union, the World Bank, and other multilateral organizations, committed to supporting the authorities’ efforts.",
    "Timeline and approvals:",
    "Program aims:",
    "Three main program areas:",
    "$17.1 billion (Stand-By Arrangement amount noted).",
    "24-month Stand-By Arrangement for €12.95 billion.",
    "Part of a total €20 billion financial support package.",
    "GDP growth averaged over 6½ percent per year from 2003 to 2008.",
    "Average of 9 percent growth during the first three quarters of 2008.",
    "13 percent decline in the fourth quarter of 2008.",
    "Leu depreciation of more than 15 percent against the euro since October 2008.",
    "Over half of domestic private credit is in foreign currency.",
    "[https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[IMF Survey Interview](https://www.imf.org/en/news/search)",
    "[Watch the video in English](https://www.imf.org/external/mmedia/view.asp?eventid=1475)",
    "[Watch the video in Romanian](https://www.imf.org/external/mmedia/view.asp?eventid=1496)",
    "[Press release](https://www.imf.org/external/np/sec/pr/2009/pr09148.htm)",
    "[IMF Board assessment](https://www.imf.org/external/)",
    "[IMF outlines Romania loan plan](https://www.imf.org/external/pubs/ft/survey/so/2009/CAR032509A.htm)",
    "[Romania and the IMF](https://www.imf.org/external/country/rou/index.htm)",
    "[Key issues: emerging markets](https://www.imf.org/external/np/exr/key/emkts.htm)",
    "[Emerging markets face pressure](https://www.imf.org/external/pubs/ft/survey/so/2009/NEW031909B.htm)",
    "[IMF helps emerging Europe](https://www.imf.org/external/pubs/ft/survey/so/2009/INT011409A.htm)",
    "[Emerging market currency risk](https://www.imf.org/external/pubs/ft/survey/so/2008/CAR102808A.htm)",
    "[Emerging Europe’s income gap](https://www.imf.org/external/pubs/ft/survey/so/2008/CAR080108C.htm)",
    "[IMF’s emerging market loans](https://www.imf.org/external/pubs/ft/survey/so/2008/POL102908A.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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