Romania's economic growth cut to 1.2 percent on drought-stricken harvest

Romania’s economic growth cut to 1.2 percent on drought-stricken harvest

Newsroom 10/08/2012 | 06:41

The Government slashed the economic growth forecast for this year by 0.3 percent to 1.2 percent of GDP, according to a budget amendment bill seen by Mediafax newswire. PM Ponta said the estimate was reduced due to the drought that affected the agricultural sector.

Romania registered an economic growth of 2.5 percent of GDP last year, mainly due to a good agricultural output, but the prospects for this year are not too optimistic. The EBRD recently cut its estimate on the economic expansion in Romania to 0.8 percent of GDP, citing a weak growth in the Euro zone, which is Romania’s main export market.

“Last year was exceptional for agriculture and this allowed us not to register an economic loss. This time the forecast in agriculture is negative,” said PM Ponta on Wednesday, quoted by Agerpres newswire.

Romania’s GDP fell by 0.1 percent in the first quarter but moved up by 0.3 percent compared to the similar period of last year. The GDP is expected to reach a nominal value of RON 607.3 billion (EUR 134 billion).

The next year’s budget includes an economic growth of 2.5 percent of GDP, while the EBRD sees it at 1.8 percent.