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May 19, 2022

AOAR: GDP to increase by 1 pc at most in 2010

The Businessmen’s Association of Romania (AOAR) estimates that the country will achieve an economic growth of 0.5-1 pc this year, lower than the 1.3 pc forecast issued by authorities, with an annual inflation of 4 pc. At the same time, most entrepreneurs also see the annual inflation at 4 pc, with some of them expecting a figure of 3.5 pc. BNR wants to keep inflation between 2.5 pc and 4.5 pc and estimates the annual inflation rate at 3.5 pc, Mediafax reports. For the budget deficit, forecasts generally range between 5 and 7 pc, the estimated trade deficit stands at 6-7 pc, while the current account deficit is expected by most entrepreneurs to reach 5 pc. AOAR members also forecast an exchange rate of 4.2 RON/EUR, while few of them would rather see it at 4.4 RON/EUR, and even 4.1 RON/EUR.

On the other hand, entrepreneurs expect unemployment to exceed 8 pc and see the foreign investments attracted by Romania at EUR 4 bln, plus post-accession European funds worth EUR 1.5 bln. There are also more optimistic opinions about EUR 2 bln being drawn as post-accession EU funding, or even EUR 3 bln. According to AOAR officials, January did not bring good news, with more than 2,000 insolvency procedures being opened in the first month of the year, so the number of insolvencies might go as high as 5,000 in Q1. With respect to adopting the European single currency, businessmen appreciate it will most likely happen in 2015, but some of them opted for 2017, or even 2018.

According to AOAR, exports will significantly pick up in 2010, as there already are obvious signals, but the focus on foreign markets will also have negative effects, such as higher imports.

“It is foreseeable that export will fare very well this year. On one hand, it is good to create GDP out of exports, with competitive firms, but on the other the lack of domestic demand is bad, as it breaks links of the local production chains,” AOAR President Florin Pogonaru explained.

The Businessmen’s Association of Romania yesterday launched the White Book – Romania’s Economy 2010, which features an optimistic opinion about the economy, which is however more tempered than that of politicians, AOAR officials say.

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