Romanian economic analysts say Moody’s recession forecasts for Romania in 2009 are much to pessimistic and draw the attention that economic evolution depends very much upon the government plan of the new executive, whereas there are persons saying the forecasts are “accurate and realistic”.
Moody’s senior analyst Kenneth Orchard said yesterday that Romania would likely enter a recession in 2009, as lending and domestic consumption will be affected by the shaky economic conditions worldwide, and the new government will be forced to toughen the fiscal policy.
The technical indicator of a recession used by economists is two consecutive quarters of negative economic growth as measured by a country's gross domestic product (GDP).
“Moody’s opinion seems to me as a hypothesis in calculus, which must be taken into consideration, but I don’t think this is the most probable. A recession means two successive quarters of decline in the gross domestic product, and I don’t think any of this will happen,” Bogdan Baltazar, financial analyst, said to Wall-Street.
He also draws the attention upon the fact that domestic economic evolution depends very much on the government plan of the new executive.
“Of course very much depends on the wisdom of the new government, in the purpose of freezing expenses with salaries, of freezing salaries and not to raise them by 30%. It also depends on starting budgeted programs, projects of infrastructure, which fail to be completed due to corruption and incompetence,” said Baltazar.
Moody’s expects Romania's gross domestic product to shrink 0.3 percent and the budget deficit to reach 4.9 percent of GDP, whereas there is “volatility regarding the forecasts”, due to uncertainties on the economic conditions across the world.
Cabat: the forecasts are realistic
Moody’s analyst said a sharp decline of economy
