Forecasts on Romania’s economic growth released over the last month indicate a poorer performance of the national economy for the remainder of this year. If in January, the majority of the analysts expected the economic growth to stay in the positive camp, the revisions show a staggering 7.1% contraction of the nation’s GDP.
ING Bank Romania has revised downward this-year GDP contraction from -3.5% to -7.1% while economic growth is expected to turn positive as late as in third quarter 2010, reads the bank’s report.
“After a 7.1% economic growth in 2008, a first sign of overheating, we forecast 7.1% economic contraction in 2009. We also expect to see a weak activity in agriculture this year”, ING Bank said.
Furthermore ING’s analysts expect the economic growth to turn positive as late as in first quarter 2010.
“Apart from the global recession, there are other factors responsible for the contraction of the Romanian economy. The April statistics made public this week were generally lower than expected: construction sector dropped 13.7%, industrial production by nearly 10% and retail industry by 10.3%. Except for the industry, the other sectors deteriorated compared to first quarter, heralding a further decline in the second quarter 2009”, ING said.
On the other hand, ING’s analysts outline the ongoing weakening of the lending activity, while outlook remains negative.
“The discouraging data on GDP and somber forecasts both for Romania and for the region provide support to our view of a roughly -7.1% economic contraction”.
Convergence program: Romania’s GDP could shrink by 4.4%
Convergence program: Romania’s GDP could shrink by 4.4%
Romania’s gross domestic product could shrink by more than 4% this year, on weak agricultural activity in the event of flood or drought, and higher-than-expected damages caused by the global c
