Raiffeisen estimates that the Romanian economy will reach the lowest level in QIV
Publish date: 12-10-2009The analysts of the Austrian financial group Raiffeisen expected that the economic activity in Romania reach the lowest level in QIV of this year, as the latest statistics show that in QIII the drop will continue.
"We expect the economic activity reach the lowest point in QIV in 2009. However, the coming back of 2010 will be moderate, the growth rate being under the potential of the economy" the report published on Friday says.
The Raiffeisen analysts mention that the latest statistics show good signs for industry : production increased in July by 0.2% against the previous month and dropped by 0.3% in August but the data for this months were influenced by the closing down of Dacia for annual maintainance. For QIV, the economists of the group expect an increase of almost 0.8% of the industrial production against the previous quarter.
In the retail sector, the situation was stable, but the activity in constructions continues to get worse, Raiffeisen considered, but estimates that " the most probable, the constructions will be the only sector to come back from the crisis".
« Indicators suggest that GDP contracted in QIII of 2009 in real terms. However, we think that the rhythm of decrease was slower than in QII when the drop was of 1.1% " the report shows.
Against the same period of 2008, the Romanian economy contracted by 6.2% in QI and with 8.7% in QII.
The analysts of the group underlined the fact that indicators regarding trust on the economy sectors go to the same conclusion that the lowest point of the economy is " quite close".
Raiffeisen warns that, in connection to the political risks of Romania, as the political crisis has been started after PSD withdrawal from the government it could lead to the government fall and the failure to meet the conditions agreed upon with IMF.
"Political instability could limit the capacity of the government to strengthen the control of the finances and to reduce the budgetary deficit. If Romania does not succeed to reach the targets of IMF, the Fund will stop, very probably, the following stages programmed in the stand-by agreement" the Raiffeisen analysts say.
"This could have a negative impact on risk perception, as a consequence, on the exchange rate and real economy" the economists say.
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