BCR: up to 160,000 unemployed in 2010

The unemployment rate shall advance in 2010 to 9 per cent from 7.4 per cent expected at the end of this year, with 150,000 - 160,000 persons losing their jobs, most of them from the public sector, according to the analysts of Banca Comerciala Romana (BCR), cited by Mediafax.

"It is only to achieve a cut in the expenditures incurred by salaries by 0.65 per cent of GDP that 130,000 civil servants should be made redundant. In order to reduce expenditures, my opinion is that a mix of measures should apply, layoffs and cuts in incomes for civil servants, since Romania does not afford such a high rate of unemployment, which would put pressure on economy", according to BCR chief economist, Lucian Anghel. He believes that 100,000 positions from public administration are closed next year, simultaneously with measures aiming at reducing salaries in the public sector which will result in the savings agreed by the Government with IMF.

BCR analysts have revised the forecast as to the unemployment rate for next year, their previous estimation being more optimistic, only 7.6 per cent. The significant raise of prices because of crisis and slowdown in raises for most of products are clear indications that there were still markets posing high rigidity, which jeopardizes accession to EUR zone, as BCR chief economist added.

BCR revised downwardly the inflation forecast for the end of this year, from 5.5 per cent to 4.5 per cent, considering that a very low variation of the exchange rate is expected at least until November. BCR estimates RON 4.2 / EUR 1 this year, RON 4.1 for EUR 1 in 2010 and RON 4 for EUR 1 in 2011, whereas inflation is estimated to reduce to 3.1 per cent next year and to pose a slight increase to 3.2 per cent in 2011.

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