* The leu risks a depreciation of 15-20%
The severe worsening of the crisis in the Eurozone, which has an average likelihood of coming true, would have a major impact on Romania, as an economic drop of 5% and a depreciation of the leu of 15-20% is possible, the experts of the International Monetary Fund (IMF) warn.
Taking into account the experience of 2008-2010, an economic drop of 5% would be possible, whereas a depreciation of the exchange rate of 15-20% would seriously affect the portfolios of banks, according to the country report drawn up by the Board of the Fund. In the event of a serious worsening of the crisis in the Eurozone, Romania would need emergency liquidity and accessing the stand-by agreement with the IMF may become necessary.
The crisis left "deep scars" in the Romanian economy, and the potential growth of the GDP would need time to recover, according to the IMF. The experts of the Fund estimate a potential growth of less than 2% until 2014 and a gradual acceleration to 3.1% in 2017. The growth levels of 5-6% which existed before the crisis are difficult to achieve in the absence of major reforms, which would attract more people to the labor market and attract investments.
The IMF revised the estimate for the potential growth of the GDP from 2% to 1.4% for this year and from 2.9% to 1.8% for next year. In 2014, the potential growth could amount to 2.2%, to 2.7% in 2015, 2.9% in 2016 and 3.1% in 2017.
Romania has made significant progress in its macroeconomic stabilization, under the two stand-by agreements, but the economic recovery remains fragile, the report says.
The IMF experts said: "It is to be expected that the short-term growth would remain subdued and only a gradual recovery could take place in the medium term, with the risk of a rather negative outlook. Strongly connected to the economic and financial s
