Economists also foresee lower inflation in the third quarter, at 7 percent, compared to 7.2 percent in the April-June period. For Eastern Europe, inflation is estimated at 6.3 percent, compared to 5.8 percent in Q2.
Along with Romania, several other countries in the region, namely Estonia, Hungary, Latvia, Lithuania, and Poland will register slower gross domestic product (GDP) growth. Only Slovakia and the Czech Republic are likely to post solid growth in the second half of 2008. The negative perspective is due to the impact of the euro-zone, where the economic climate registered a general decline.
However, Romanian analysts disagree with the CESifo Institute report. “I do not think the scenario drawn up by the university is plausible. Given we have a significant advance in the construction sector and a good agricultural year, I do not think we can expect a significant slowdown. The impact of the euro-zone is very low on Romania. If the euro-zone GDP would slow from 2 percent to one percent, the economy of our country will slow by 0.5-0.7 percentage points,” according to Raiffeisen Bank Romania’s head of Macroeconomic Research, Ionut Dumitru.
In fact, the agriculture sector could bring record growth. “I do not think there will be a slowdown. At least not in the third quarter and not a major one. Romania’s agriculture does not depend on Western Europe’s economic slowdown. I think the third quarter will be one of the best this year,” lender Banca Comerciala Romana (BCR)’s Chief Economist, Lucian Anghel, told Business Standard.
