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May 18, 2022

EBRD revises 2011 growth forecast to 1.8 pc

The European Bank for Reconstruction and Development (EBRD) has revised the Romanian economic growth forecast for 2011 from 1.1 per cent in January to 1.8 per cent, expecting that austerity measures would keep the budget deficit under control and economy would make modest progress, according to the Regional Economic Prospects report the bank published on Friday, Mediafax reports. For SE Europe (the country covered by the study were Romania, Bulgaria, Albania, Bosnia and Herzegovina, Macedonia, Montenegro and Serbia), the financial institution anticipates 2.2 per cent economic growth this year, higher than the 1.9 per cent forecast in January. On the other hand, in Central and Eastern Europe, EBRD forecasts 4.6 per cent economic growth in 2011, primarily sustained by Turkey (6 per cent), Russia (4.6 per cent) and Central Europe (3.5 per cent).

At the same time, the bank warns that economic recovery in the region is still endangered by risks such as the euro-zone crisis and the major rise in commodity prices. The growth will be supported in a majority of countries by improved domestic demand and Russia and Kazakhstan will have to gain from the rising oil and gas prices. Another risk CE European economic prospects are facing is a possible limitation of liquidity on emerging markets following the European Central Bank harshening monetary policy and phasing out of ultra-relaxed measures by the Federal Reserve.

The International Monetary Fund (IMF) and the European Commission (EC) forecast 1.5 per cent economic growth in Romania this year. EBRD expects Romanian GDP to grow by 3.8 per cent in 2012, the forecast being quite similar to both IMF and EC’s.

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