Coface forecasts Romania's economic growth should brake to 5.2% this year on widening gaps

Financial services provider Coface estimates Romania's economic growth should lower to 5.2 percent this year, due to the widening of the macroeconomic unbalances, people with the company said.

Romania saw a 5.8 percent economic growth last year. Coface believes the country's budget deficit should stand at 3.2 percent of the gross domestic product, over the European Commission's limit of 3 percent.

Last year's deficit stood at 2.4 percent of the GDP. Romania's current account deficit could widen to 14.6 of the GDP this year, according to Coface, up against last year's 14 percent, the main cause residing in the widening of the commercial unbalance to 32.6 billion euros in 2008, from 28.2 billion euros last year.

Coface forecasts a lower inflation this year of 4.6 percent and up against the 6.57 percent inflation Romania registered at the end of 2007. The unemployment rate should also lower to 4.4 percent, down against last year's 6 percent.

Romania's economic trumps are the "relatively large" domestic market, still reduced costs of labor force, low public debt, large foreign currency reserves and the capacity to draw a bulge of foreign direct investments which helped cover parts of the foreign deficit.
 
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