WIIW Study : The economic recovery will have to wait in RomaniaPublish date: 17-03-2010
Romania, similar to Bulgaria and Hungary will come out of the recession in 2010, when there will be an economic growth of 0 after a contraction of the GDP of 7.2% in 2009, the Institute for International Economic Studies in Wien (WIIW) says in a recent study.
According to this, in 2011, the Romanian economy will register an increase of the GDP of 3% followed by an increase of 4% in 2012.
As a whole, all countries in south east Europe will come on the increase only in 2011 but at lower levels than before the crisis, WIIW warns. The new EU member states will record an average increase of 2.8% in 2011 and an increase of 3.6% in 2012, as compared to an increase of 4.2% in 2008.
"What was worse has passed, but unfortunately, the best period has also passed" the WIIW expert Peter Havlik said, on the occasion of the presentation of the new prognosis" The CEE region was sent back a couple of years" Havlik added.
Out of the ten new member states of the EU, only the three Baltic states will remain in recession in 2010, the rest of seven recorded last year a contraction of GDP of 3.6% being less affected by the crisis than the older member states which recorded a contraction of the GDP of 4.1% in 2009.
Besides the weak relaunching, unemployment will continue to increase in 2010 so that after 2012 to come back slowly to the level before the crisis. For the ten new member states, the rate of unemployment would reach in 2010 an average of 10.2% against 6.5% in 2008. According to WIIW the figure could decrease at 8.4% in 2012. In the case of Romania, WIIW estimates that the unemployment rate will not cross the threshold of 10% in the following years.
The governments of the Eastern European countries did not have many chances to avoid failure, out of many budgets missing the money for short term economic programmes. Even today, the overburdening is on the increase as well as unemployment. The so much feared exodus of investors did not end. Last year, Hungarians, Slovacs and Slovenes waited for foreign investment for nothing. The crisis made the process of convergence to slow down of the former countries under transformation, in the meantime being questioned the model of economic growth of the whole region, especially as these were the causes which led to the fall down of many of the former eastern bloc countries. Even if in the meantime loans were no longer offered so lavishly as before, overburdening did not stop. " Loans for families and companies grow all the time" Peter Havlik, expert with WIIW says. An exception are Ukraine and Hungary.
Behind the crisis of debts are not the states but the citizens who - desiring to have a western way of life - contracted cheap loans from abroad, the evolution of the debts being underestimated, Landesmann shows. Even if on a short term it is necessary to offer loans for companies, on a long term this practice should change, he said.
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