EBRD improves projections for Romanias 2011 GDP growth to 1.9%.

By bne IntelliNews July 25, 2011
The EBRD improved marginally its projection for Romanias GDP growth to 1.9% in 2011 in the July edition of its Regional Economic Prospects, compared to 1.8% in the May forecast. An economic growth of 3.8% in expected in 2012 with the forecast remaining unchanged from the previous report. The inflation rate is expected to surge to 6.7% in 2011 from 6.1% in 2010. The fiscal balance is seen at a deficit of 4.4% of GDP in 2011 after 6.5% in 2010. The current account surplus is expected to expand to 5% of GDP in 2011 from 4.2% in 2010. A positive trend is seen in net FDI, which are to climb to 2.9 % of GDP in 2011 from 2% in 2010. The austere fiscal policies conducted by the government help reduce the risks on the fiscal side, but delay the recovery of domestic demand, the report said. As a result, Romanias GDP growth would be this year the weakest in the region covered by EBRD, except for Croatia. The governments forecast, drafted under the stand-by agreement in cooperation with the IMF, includes an even more moderate projection of an 1.5% growth this year.

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