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IMF warns Romania on pension changes

The International Monetary Fund criticized Romania on Friday for plans to raise pensions sharply, saying the move is likely to stoke inflationary pressures and give a new boost to the current account deficit, Reuters reported. 

The Romanian parliament cleared a draft law on Thursday nearly doubling state pensions in the next two years. The government also plans to lower social security contributions by 6 percentage points in 2008. “While we understand pensions are low, fiscal decisions need to recognize there is a budget constraint and should not be taken in isolation of the macroeconomic environment,” the IMF's senior regional representative Juan Jose Fernandez-Ansola told Reuters in written comments. (