Romania still ofers a good perspective for greenfield investments, an analyst for The Economist Intelligence Unit. Still, whether the economic slowdown will cause a hard landing or a soft one for Romania in the following year is a problem worth analyzing. In an exclusive analysis for HotNews.ro, Joan Hoey, EIU Senior Analist for Eastern Europe taks into account the "gravity defier" status Romania has, the Romanian Central Bank actions and the appreciation of the European currency against the US Dollar.
Can Romania achieve a "soft landing"?
There have been mixed assessments of the likely impact of the intensifying global financial crisis on the prospects for the Romanian economy. The governor of the National Bank of Romania (NBR), Mugur Isarescu, has argued that Romania should be able to avoid a "hard landing", involving a sharp contraction in growth, as it attempts to cool down an overheated economy and react to adverse external circumstances that are largely beyond its control. Mr Isarescu's comments preceded the meltdown on nternational financial markets in late September and early October, the fallout from which will undoubtedly have a negative impact on Romania's economy and will
complicate macroeconomic policy under a new government in 2009-10.
The IMF forecasts that growth will slow from 8.6% in 2008 to less than 5% in 2009 (which is broadly consistent with EIU forecasts). The slowdown in the growth of domestic credit will bring about a slowdown in consumption and investment and the growth slowdown in the West will affect Romania's exports and foreign direct investment (FDI).
"Gravity defiers"
Since the deepening of the global crisis in September, one commentator has coined the term "gravity defiers" to describe east European economies such as Romania, Bulgaria, Serbia and Croatia which have so far a
