Standard & Poor's estimates Romania's economy could advance 0.8% in 2009Publish date: 25-02-2009
The most recent report of rating agency Standard & Poor's (S & P) places Romania again next to the Baltic states, Bulgaria and Hungary in a group of highly vulnerable states, and anticipates it will witness an economic advance of 0.8 percent in 2009, after a hike of 7.3 percent in the previous year.
The resilience of Eastern European economies seems to be crumbling under the weight of high foreign currency debt and the potential reprioritization of lending among foreign banks, the report shows.
Romania, once one of the economic high-fliers, is also poised to slow sharply in 2009. After an impressive 7.3% in 2008, the GDP growth will plummet to 0.8% this year, deem S&P analysts.
"The financial crisis that started to hit developed economies after August 2007 did not immediately affect East European economies," said Jean-Michel Six, S&P chief economist for Europe. "In fact, through the first half of 2008 their economic prospects still appeared resilient. But in the second half of 2008, the effects of the crisis started to filter through the region and are now gathering momentum."
The S&P report divides the regional economies into two groups. One is formed by the more stable economies of the Czech Republic, Poland and Slovakia and the second one features more vulnerable economies among which Romania is once more present, next to the Baltic states (Estonia, Latvia, and Lithuania), Bulgaria and Hungary.
The S&P estimates for economic growth of Bulgaria are similar to those for Romania, the rating agency anticipating a gross domestic product (GDP) advance of 1 percent in 2009 for the neighboring state. Hungary however is estimated to see a 2.5 percent drop in its GDP for the year, while the Baltic states are mentioned in connection to their large dependency on external financing.
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