Romania could brake economic advance to 0.8% in 2009, Standard & Poor's estimatesPublish date: 12-02-2009
Romania will see an economic advance of only 0.8 percent this year compared to the 7.3 percent reported in 2008 and the current account gap will adjust to 10.6 percent of the country's gross domestic product (GDP), rating agency Standard&Poor's (S&P) estimates in a report.
Romania's economic growth was underpinned, just like in the rest of the region, by the internal demand, fueled by a surge in credits, which led to a boost in consumption and investments, the report reads.
But S&P analysts see the economic advance in the region strongly decelerating on a powerful shrinkage of crediting and a plunge in the economic activity. The recession that hit the Eurozone and the negative outlook regarding the economic growth among other trading partners will also impact the emerging states.
However, Romania will resume its economic advance starting with 2010, when the GDP will add 1.8 percent, while the growth is seen at 3 percent for 2011, the S&P reports shows, placing Romania behind Hungary and Croatia.
The current account deficit will adjust steadily, from 13.5 percent of the GDP in 2008 to 10.6 percent at the end of this year and 10.1 percent in 2010. The agency estimates the external deficit at 9.8 percent of the GDP in 2011.
On the other hand, foreign direct investments will reduce their weight in the GDP by almost half, from 6.2 percent in 2008 to 3.2 percent in 2009. The percentage will remain at 3.2 percent in 2010 but hike to 4.3 percent of the GDP in 2011.
After the inflation rate reached an average 7.9 percent last year, it is expected to temper to 5.3 percent in 2009 and maintain the deflationary trend to reach 4.7 percent in 2009 and 4.3 percent in 2010, the agency deems.
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