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18
March

Not one year ago, growth prospects for the GDP in Romania were rather optimistic, several forecast institutions predicted GDP growth to be much above the EU-Average for 2009 and even onwards. With some delay, after the breakout of the fincial crisis GDP growth estimations for Romania were gradually downsized.

Update Note: a Resume of 2009 and data for the economy of Romania in 2010 is available here.



But still, at the beginning of 2009 the predicted growth rates for the GDP of Romania still were positive – ranging from 3% – 5% in 2009 – now, just two month later the International Monetary Fond (IMF) warns that Romania’s GDP be will be hit be an outright recession this year: negative growth of 4% is expected by the evaluation comission of the IMF…

January 2009: The CNP (Comisia Nationala de Prognoza) downsized growth expectations for the GDP of Romania from somewhat over 6% (estimations from 2008) to 2.5% followed by 4.5% for the following year. The Romanian experts as interviewd by Business Standard all estimated (with a single exception) positive growth rates, ranging from 1.7 to 4.5%. The expected average growth rate for the GDP of Romania lied at 3.05%. Only one analyst expected negative growth.

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But also the Economist Intelligence Unit still expected a positive growth rate for 2009 (2.6%) and for the upcoming years. Eurostat still seems to expect the Romanian GDP to grow by 4.7% this year.  Now, while Romania negiotiates with the EU and the IMF about a rescue package worth some 20,000,000,000 Euro, Cotidianul reports that the evaluation comission of the IMF expects negative GDP growth for Romania during 2009, accompanied by a fiscal deficit of 4.7%. Up to now, President Traian Basescu spoke just about negative growth of 1%  for the real GDP in 2009. This is rather in line with the most recent expectations of the  Minister of Finance, Gheorghe Pogea, who just recently mentioned similair expectations, as Cotidial reports as he admitted the possibility that GDP could shrink by 1%. However, other governmental sources declared meanwhile, that the targeted fiscal deficit of 2% will hardly be met, and that 3.5% are much more likely.

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The same sources, accoring to the article by Cotidianul, claim that the credit to be accorded by the IMF, and partly the EU, will be worth some 18 billion Euro, which are to be paid quarterly over two years. During this time, Romania will not have pay back any of this money. Thereafter, Romania will have to pay for further three years, just the interest on the credit, while payback will start only after this period. Thus, after 5 years.

The report of the IMF is not published, yet. Cotidianul announced that the report will be officially published during the next days, and issued by the IMF itself. It is said to be the most pessimistic report up to now concerning the economy of Romania during 2009, and even for the next years.

Romania Central will come back to you with further news and comments as soon as the IMF report is available and discuss the development of the GDP and need for credit further.

Category : 2009 / Crisis Romania / Economy of Romania / News

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