Romania plans to raise value-added tax (VAT) to 24% in an effort to curb the country's deficit, the prime minister has said.

Emil Boc said the 5% rise was an attempt to guarantee a $20bn International Monetary Fund (IMF) loan.

The move comes after Romania's top court ruled out plans to cut pensions, prompting the IMF to delay key talks.

But critics say the VAT rise will hit consumer spending in the European Union country.

"The government has decided to raise the VAT tax by five points," Mr Boc said at a press conference.

"Under these conditions, the agreement with the IMF will continue".

He said an IMF meeting to discuss Romania's aid package would now be held on 30 June.

The austerity plan negotiated by the government with the IMF aims to cut the national deficit from 7.2% of output to 6.8%.

So if any forumites plan to make any large purchases in Romania, it would be wise to get them completed before this rise comes in! Thanks for the heads up!