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December 8, 2021

EBRD increases growth estimates for Romania to 1.3 pc in 2010

The European Bank for Reconstruction and Development (EBRD) on Friday revised upwards the economic growth estimates for 2010 in its field of activity. In Romania’s case the EBRD staked on a 1.3 percent expansion of the GDP this year, when the previous prognoses, which were made public in October 2009, pointed to a 1 percent growth. According to an EBRD release, the bank also improved its estimates referring to the economic contraction in Romania in 2009 from an 8 percent decrease of the GDP, as estimated in October 2009, to a 7 percent contraction. In 2011 Romania would register a 2.3 percent increase in the GDP, according to the EBRD. The EBRD emphasizes the fact that, in Romania’s case, the relaunch may be slowed down by the tightening of fiscal policy. According to the EBRD, the increase in the bad loans and the more cautious loan policies will diminish the wish of the banks to give loans, whereas the recovery of the foreign demand will be counterbalanced by the tightening of the fiscal policy that is necessary in many countries in the region. South-eastern Europe will have similar growth as central Europe and the Baltic states but with significant heterogeneity. Parts of south-eastern Europe may benefit from a rebound in metals prices (e.g. FYR Macedonia and Serbia) or from capital inflows following a recent rating upgrade (Turkey). In central Europe and the Baltic states, the EBRD expects average growth of 1.4 per cent in 2010.In the Baltics and Hungary growth is expected to remain negative in 2010 despite a gradual bottoming out of the deep recession. Poland, the Slovak Republic and Slovenia are likely to benefit from a rebound in eurozone growth, being deeply integrated into Western European manufacturing production and having entered the crisis with more moderate domestic demand growth. Chief Economist Erik Berglof said, “The recovery in the region remains fragile, with large variations across countries. The gradual global recovery will support regional growth, but local factors will dampen it. Appropriate public and private sector policies and actions to clean up balance sheets, restructure debt and deal with distressed assets will be important to help sustain credit growth and support economic recovery.”

On yhe other hand, the perception of financial experts on Romania’s economic evolution during the next six months had the most spectacular improvement in Central and Eastern Europe (CEE) this January, according to a survey by German ZEW Institute, Mediafax reports. The ZEW index that describes the expectations of analysts found out, in Romania’s case, an increase by 25.7 points, to 64.4 points. Romania thus jumped to the third place in CEE, based on experts’ forecast for the next six months.

The current perception of the Romanian economy also went through a significant improvement, of 17.4 points, to -58.6 points, according to the survey conducted by ZEW jointly with Austrian financial group Erste.

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