Nov. 6 (Bloomberg) -- The International Monetary Fund said it will delay the next payment from its bailout loan to Romania after the government collapsed, thwarting attempts to pass next year’s budget and push through deficit-cutting measures.

The Washington-based lender will disburse the next tranche of the country’s 20 billion-euro loan package ($30 billion) after a new government is in situ instead of December, said Jeffrey Franks, head of an IMF mission to Romania, at a press conference in Bucharest today.

The government collapsed last month and Prime Minister- designate Lucian Croitoru failed this week to win parliamentary approval for his proposed Cabinet, prolonging a political stalemate. President Traian Basescu today named Liviu Neogoita, mayor of a Bucharest district, as his second premier designate. The European Union’s second-poorest member is relying on the bailout that is conditional on cutting the budget deficit.

“The key issue is clearly the 2010 budget,” Franks said at the press conference. “Without action, we would anticipate the deficit would reach 9 percent of GDP.”

Romania’s economy contracted an annual 8.7 percent in the second quarter, the most on record, as consumption dropped. The recession may have bottomed in the third or fourth quarter and the economy may show a “slight improvement” in the final three months of the year, central bank Vice Governor Cristian Popa said at a separate press conference today.

Romania pledged to keep the budget shortfall within 7.3 percent of gross domestic product this year.

The country failed to sell debt securities yesterday for the third time since the beginning of October because of investor concern the government’s collapse will prevent measures needed to stabilize the economy.

Romania today sold 793.8 million euros of euro-denominated bonds on the domestic market to raise funds to finance its economy. The offering was oversubscribed.

To contact the reporter on this story: Irina Savu in Bucharest isavu@bloomberg.net.

Last Updated: November 6, 2009 09:41 EST