EC sees Romania's 2012 GDP growth at 3.7%.

By bne IntelliNews May 16, 2011
The European Commission expects the Romanian economy to expand by 1.5% in 2011 and to rebound to a 3.7% advance in 2012, the Commission said in its Spring 2011 European Economic Forecast. The Commission expects next year's GDP growth to exceed the natural growth of 2.5-3%, driven by a combination of private consumption on by higher wages, a stronger public consumption still limited by budget constraints and a robust growth of the gross fixed capital formation. Private consumption and investments will widen the CA deficit close to 5% of GDP in 2012, putting an end to the sharp narrowing in 2009-2010 when the gap reached 4.2% of GDP. The structural reforms, necessary to enhance export capacities and competitiveness, have been insufficient so far, the Commission estimated. The fiscal consolidation is likely to continue with the general government deficit easing to 4.7% of GDP this year and 3.6% of GDP in 2012, as a result of the implementation of ambitious fiscal consolidation measures in mid-2010 and further expenditure restraints. The price stability outlook is not bright, and the projected 6.7% average rise in consumer prices this year will most likely not allow the central bank to cut the interest rates. The positive base effects in food prices are likely to be offset by the risks from energy markets liberalisation, so the average inflation is seen still at around 4% y/y in 2012.
EC Spring Forecast
2007 2008 2009 2010 2011 2012
GDP y/y % 6.3 7.3 -7.1 -1.3 1.5 3.7
Contr. to GDP growth:
Domestic Demand pps 15.9 11.9 -14.4 -5.1 0.9 3.6
Inventories pps 0 -3.5 -0.1 4.1 0.3 0.8
Net Exports pps -9.6 -1 7.5 -0.2 0.3 -0.8
Private Consumption y/y % 11.9 9 -10.2 -1.7 0.6 3.1
Public Consumption y/y % -0.1 7.2 1.6 -3.6 -1.5 1.5
Gross fix capital formation y/y % 30.3 15.6 -25.2 -13.1 3.5 5.9
CA balance % of GDP -13.6 -11.4 -4.2 -4.2 -4.4 -4.8
General gov balance % of GDP -2.6 -5.7 -8.5 -6.4 -4.7 -3.6
HICP consumer prices avg y/y % 4.9 7.9 5.6 6.1 6.7 4
Source: EC
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