ING: The economic re-launching will be "U" shaped

Publish date: 10-09-2009
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The economy of Romania will have, most probably, a "U" shaped re-launching, but there are significant risks connected with a "W" scenario, according to an ING analysis, Mediafax informs.

In this context, the main influential factors are the global economy and the implementation of the fiscal policy measures at local level.

ING Bank analysts have revised upward the estimates regarding the evolution of the economy in 2010, from a GDP contraction of 0.6 per cent to an advance of 1.6 per cent, but worsened the perspectives for 2011, from a growth of 2.6 per cent to 0.9 per cent, considering mainly that the adjustment will be slow in the fiscal sector, according to a report presented on Monday by the bank.

The Romanian economy will be supported by the revival of the foreign markets both from the European Union and from outside the community block, because the improvement of the situation from those markets was faster than the analysts of the banks had anticipated previously.

Moreover, the bank anticipated that the economy will benefit in the last part of this year and in 2010 from a bigger support from the monetary policy factors. Thus, according to ING, the moderate growth of GDP in 2010, considered the most probable scenario for Romania, suggests that the re-launching of the economy will be "U" shaped, pointing to s slow overcoming of the recession. On another hand, ING does not exclude the possibility of a "W" shaped re-launching scenario. "The risks of a <> (with two rounds of contraction of the economy) in US would have a negative impact on the global economy and on the Romanian one. Moreover, we should not forget the risks connected to the relaxed fiscal policy from 2005-2008 and from now, whose potential negative impact could be felt for another three years," ING analysis shows.

The analysts of the bank consider that a "U" shaped economic re-launching must be accompanied by adequate economic policies, implemented rapidly, in order to introduce the economy into a medium term sustainable growth cycle. According to the ING analysis, the first economic sector that will resume the growth in Romania could be industry, but such an evolution will probably be insufficient for the GDP to grow.

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