Government forecast for 2009 growth "overly optimistic"

Macroeconomic scenarios for this year's budget are not optimistic, with a decline in economic growth, exports, and the exchange rate expected. According to a Finance Ministry press release, the government is forecasting a significant slowdown of the trade balance, with a 4.7 percent increase in exports, compared to 13.8 percent in 2008. However, experts say that this growth, which only covers for one third of last year's increase, is too optimistic or even impossible.

Import growth is estimated at 1.7 percent, compared to 11.9 percent last year. Compared to 2008, this is the most severe slowdown of the trade balance in the country's recent history.

"The Government is forecasting a 4.7 percent increase in exports. This is very far from reality, and figures are extremely optimistic. The year 2009 will be a year of export recession, and we will register a minus in this field," according to Mihai Ionescu, President of the National Association of Romanian Exporters and Importers (ANEIR). Ionescu added that exports outside the European Union dropped 30-50 percent in November and December, and that the downward trend will continue this year.

According to economists interviewed by Business Standard, the national currency will not be of much help to exporters, although the leu is constantly depreciating against the euro.

"The depreciation of the national currency is largely cancelled for lack of orders. Gain from the weakness of the leu is not worth much if they have no orders," said the former President of Banca Romana de Dezvoltare lender (currently BRD-Societe Generale), Bogdan Baltazar. However, Baltazar added that the government should not pass a package of fiscal stimuli differentiated for various types of companies, such as exporters. "Any package of this kind could generate corruption," he said.

Business Standard