Romania might see 1.2 percent growth next year, a BCR report “Romania – under the sign of austerity” shows. According to the report, coming out of the recession will be a difficult period, marked by unpopular measures that the government will need to implement for Romania to be able to reach its target budget deficit standing at 4.4 percent of the GDP. The report also forecasts that inflation might halve by the end of 2011, while highlighting that fiscal consolidation efforts are starting to show results, and the budget deficit is presently under control.
“Romania might show a timid growth in 2011, of just 1.2 percent after two decline years when the economy contracted in real terms by around 9 percent,” said Lucian Anghel, the chief economist of BCR at the launch of the report.
Economic growth in 2011 is expected to be supported especially by investments made by private companies, while domestic consumption is expected to register only a marginal growth. Attracting new foreign investment if the internal environment will be a stable one, increasing the absorption of EU funds and fulfilling structural reforms included in the current and potentially the future agreement with the IMF and the European Union are listed by the report as key elements in going back to sustainable economic growth.