Romania's monetary policy could have been tightened further but that would have led to recession, and policymakers will likely compensate by keeping interest rates high for longer, the country's central bank Governor Mugur Isarescu said on Wednesday.

Isarescu, speaking as the bank unveiled forecasts for slower growth this year in a new outlook, also said tapping European Union funds was essential for Romania to boost investment and keep the economy growing. (Reporting by Luiza Ilie, writing by Jason Hovet; Editing by Toby Chopra)