Analysts: Poor growth but no recession in 2009

Economists also indicated that forecasts made by the Moody’s rating agency are far too pessimistic. Kenneth Orchard, Moody’s analyst, said on Sunday that Romania could be affected by a recession in 2009, considering loans and local consumption will be impacted by the international economic crisis, and the new government will be forced to raise taxes.

Moody’s estimates that Romania’s Gross Domestic Product (GDP) will drop 0.3 percent next year, but this forecast is influenced by uncertainty due to the current economic conditions worldwide.     

Orchard added that there are positive aspects as well: inflation is expected to drop to 4.5 percent by the end of 2009, from its 7.4 percent October 2008 level. The current account deficit will plunge to 8.2 percent of GDP from a present 14 percent.

“It is not plausible that there will be a recession in Romania in 2009. We could register a 4-5 percent rise in GDP next year,” said Lucian Anghel, Chief Economist of the Banca Comerciala Romana (BCR) lender.

A more pessimistic estimate was presented by Dragos Cabat, Managing Partner of the Financial View advisory company, who said that the economy will only increase by some 2.5 percent in 2009.

The National Prognosis Commission (CNP) is presently maintaining its economic growth rate estimate of 6 percent in 2009.