IMF curbs forecast of Romania's current account deficit in 2010

Publish date: 02-10-2009
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The International Monetary Fund (IMF) on Thursday revised downward its forecast of Romania's current account deficit in 2010, to 5.6 pc, according to the World Economic Outlook (WEO), Mediafax reports.

In April this year, the institution had announced a deficit of 6.5 pc. The IMF confirmed for 2009 the current account deficit of 5.5 pc it announced in August, following a consultation with Romanian authorities. At the same time, the Fund expects an average annual price increase of 5.5 pc in 2009 and 3.9 pc in 2010. In the April's forecast, the international experts had estimated inflation would reach 5.9 pc in 2009 and 3.9 pc in 2010.

The IMF maintained its August prediction that Gross Domestic Product (GDP) will fall by 8.5 pc in 2009 - in line with the previous 8-8.5 pc forecast - followed by a slight growth by 0.5 pc in 2010, similar to the data referring to an economic increase of 0.5-1 pc, before the summer. Early in August, the National Bank of Romania (BNR) revised downward its inflation forecast for December 2009 and December 2010, from 4.4 to 4.3 pc this year and from 2.8 to 2.6 pc next year. The IMF estimates December's inflation at 4.3 pc, under the central point of 4.5 pc taken into account in the negotiations for the stand-by accord, last March. For the end of 2010, the institution expects to see consumer prices going up 3 pc.

IMF improves forecast on global economic decline

Also on Thursday, the Fund improved its forecast on the contraction of the global Gross World Product (GWP) in 2009, to 1.1 pc from the 1.4 pc estimated in July, as it anticipated an economic recovery following the measures to support various countries. For 2010, the IMF expects GWP to gain 3.1 pc, compared to the previous forecast of 2.5 pc. In the euro zone, the decrease will reach 4.2 pc this year, while next year's economic growth will be limited at 0.3 pc, according to the institution's experts.

GDP this year will decrease by 5.3 pc in Germany and 2.5 pc in France, to be followed by a return to growth next year, with 0.3 pc and 0.9 respectively. In the United Kingdom, economy will register a 4.4 decline this year and will resume increase by 0.9 pc in 2010.

After a 2.7 pc decline in 2009, US economy will see a 1.5 pc increase next year. For Japan, the Fund estimates a severe correction of -5.4 pc in 2009 and a trend reversal by +1.7 pc in 2010.

In addition, the IMF revised upward its forecast of economic growth in Central and Eastern Europe, during 2010, from 1 pc to 1.8 pc, while maintaining July's estimation of a 5 pc decline this year. For 2010, the IMF sees a 1.8 increase of the Gross Product throughout CEE, higher than its previous forecast of 1 pc issued in July, writes the World Economic Outlook released Thursday by the institution. In July, the Fund had revised its estimations of the GWP, the big economies and the important geographic regions. The economic recovery process will be unevenly distributed in the states across the region, with Baltic States expected to register GDP decreases both in 2009 and 2010.

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