Romania's government sees an economic contraction in 2010 as well,after a 7% shrink of GDP this year

The new macroeconomic prognosis considered by Romania's government indicate an economic contraction of 7-7.5 percent this year and a follow-up of recession in 2010 as well, as the gross domestic product (GDP) could lower 1-2 percent, people close to the negotiations with IMF delegation told NewsIn.

However, the representatives of the International Monetary Fund (IMF) estimate Romania's GDP will narrow 8 percent this year, but maintain the 2010 prognosis, when they expect the economy to remain still.

The IMF representatives also mentioned they expect a budget gap of 8 percent in the GDP after an 8 percent economic contraction this year and that a new cut of public expenses is necessary.

Romania's current budget agreed with IMF in March has in view a gap of 4.6 percent of the GDP in 2009 and is built on an economic downturn estimate of 4 percent.

The Finance Minister Gheorghe Pogea declared today at the end of the talks with the representatives of IMF, the European Commission (EC) and the World Bank (WB) that Romania could record an economic contraction of 8 percent this year, as prognosis for the economic status of EU member states worsened.

President Traian Basescu declared for the public radio station that Romania will not fulfill the parameters fixed within the agreement with IMF for the end of the year because the economic downturn will be larger than the agreed one of - 4 percent and added that the budget gap has to be kept "somewhere at 4.6 percent of the gross domestic product (GDP)" for Romania to enter the Eurozone in 2014.

NewsIn