Analysts from Raiffeisen are expecting a slowdown in economic activity in the quarters ahead, complementary to the untackled public debt issues in the Eurozone and the US. The report states that Romania lost momentum in Q2; industrial production slowed and fear is returning as order book levels are declining.
As exports have been the main growth engine for the Romanian economy, 60 percent of total exports to the Eurozone, Raiffeisen analysts revised Romania’s growth rate forecast from 3.5 percent to 2.7 percent. EU members are starting to lose appetite for Romanian exports and the weak domestic demand will not be able to bridge the gap.
Foreign direct investments from established markets are expected to remain weak. Also, pre-crisis growth rates are not expected in the next period, as lending stays on hold and consumption is fragile.
Raiffeisen predicts that the average exchange rate for the Romanian RON in 2012 will be RON 4.19 for EUR 1.
Ovidiu Posirca