ZEW & Erste Bank: Romania's economy in a recovery process

Romania's economy shall enter a recovery process some time in the next six months in spite of the fact that the current business context is among the most difficult ones in Central and Eastern Europe, based on the outcomes of an opinion polls conducted by the German institute ZEW and by Erste Bank, Mediafax informs. The indicator of the current economic situation, which outlines the percentage between optimist and pessimistic economists as to the topic, dropped to -77.2 per cent in August compared to -71.6 per cent in July, being the lowest in the region. On the other side, the index of economic expectations advanced by 29 per cent, to 22.2 per cent, the analysts being mainly optimist as to the economic growth expectations.

The poll indicates that the economy experiences the lowest inflationary risks in Romania, from among the countries of the region, and it anticipates that the National Bank shall consider a new cut in the monetary policy interest rate over the next six months. At the same time, ZWE / Erste survey indicates that the perspectives of Bucharest Stock Exchange remained predominantly optimistic in August.

The analysts questioned by the German institute do not anticipate a new depreciation of RON in the foreign currency market, following that after the previous poll, conducted in July, prospects were still pessimistic, indicating a depreciation of the national currency.

ING reduced the estimation on annual inflation rate from 5.7 pc to 4.8 pc

ING revised the inflation forecast for end of the year from 5.7 per cent to 4.8 per cent, considering the "significant error" of the bank's analysts regarding the annual advance of the consumer prices in August and also because it is likely that the favourable impact of the food product prices persists in September as well, Mediafax informs.

"In Romania, strong seasonal factors resulted again in a negative inflation rate and an annual inflation rate of 4.96 per cent," the report mentions. The inflationary pressures are still persistent and inflation could advance faster in case a triggering factor exists, such as a weaker exchange rate or higher crude oil prices," the ING report indicates. "Our new forecast is slightly more pessimistic for September and October, but more optimistic for the last two months of the year. In our opinion, the risks for the new scenario have a tendency towards the upper limit," according to ING Bank Romania economists.

Based on ING new scenario, the annual inflation rate would be 4.4 per cent in October, compared to the previous estimation of 4.9 per cent, which means that BNR officials could consider a cut in the monetary policy interest rate by 0.5 percentage points in November.

BNR: FDI down by nearly 50 pc after seven months

Foreign direct investments amounted to EUR 2.097 bln, in the first seven months of the year, down by 47.9 per cent compared to the value reported during the same time period of 2008, which was EUR 5.948 bln, based on data from National Bank of Romania (BNR), Mediafax informs. Out of the total investments corresponding to the first seven months, the capital participations accounted for 41.2 per cent, the intra-group for 48.6 per cent, and the reinvested profit for 10.2 per cent, based on a BNR press release.

Foreign investments over January-July covered entirely the current account deficit of this time period, which was EUR 2.72 bln at the end of June, foreign direct investments amounted to EUR 2.894 bln, down by 42 per cent as against the level reported for the similar amount of time in 2008, when they amounted to EUR 5.076 bln.

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