This is the most optimistic estimate, exceeding even the figures advanced by the Romanian government, of 2.5 percent. Furthermore, for next year, the bank is forecasting 5.4 percent growth of Romania’s gross domestic product (GDP). The figures for Romania are the best for the entire Central and Eastern European region (ECE), with the exception of Bulgaria, for which the bank has not made a forecast. Erste has taken into consideration a possible drop in the monetary policy key rate by the National Bank of Romania (BNR), in its upcoming monetary policy meeting. A gradual reduction (by a quarter of a percentage point) and a drop in minimum mandatory reserves would raise liquidity on the market. “Inflationary pressures are persisting at quite a high level due to the depreciation of the leu and a rise in administered prices. In this context, BNR will attempt to maintain a difference of at least three percentage points between the key rate and inflation at the end of the year,” explained Dumitru Dulgheru, Banca Comerciala Romana (BCR) Economist.
Erste is also more optimistic about other indicators, estimating 5 percent unemployment this year, half a percentage point less than the Romanian government’s forecast, which would mean the best rate for all ECE countries analyzed.
On the other hand, Erste’s forecast for the current account deficit is less optimistic, at 12 and 9.8 percent for 2009 and 2010, respectively. The bank is also predicting a similar scenario for the public deficit, estimated at 4 percent of GDP this year, and 3.3 percent in 2010.
Neither is Romania expected to do much better in terms of inflation, especially if its rate is compared to prognoses made for the other Central and Eastern European states. Erste is estimating 5.4 percent for Romania, while the best rates for the December-December period will be posted by the Czech Republic (2.5 percent) and Poland (2.8 percent).
