The crisis hits Romania’s economy hard in Q4

The GDP registered a 9.1 percent annual advance in this year’s third quarter, and an 8.9 percent year-on-year increase in the first three quarters of 2008.

But the crisis hit Romania’s economy hard in the last three months of 2008. According to financial analysts, the economy could register a growth pace of maximum seven percent in this year’s final quarter.

In terms of economic growth, one of the most significant events in 2008 was the upward revision by 2.6 percentage points of GDP’s evolution by the National Prognosis Commission (CNP).

On the other hand, a slowdown in the economic growth of the European Union led to a drop in consumption which, in turn, limited inflation. In Romania, inflation registers a downward trend, in spite of the strong economic growth. Consumer prices rose by 9.04 percent in July, but with only 6.74 percent in October.

BNR’s inflation target is 2.8-4.8 percent for 2008 and 2.5-4.5 percent for 2009. According to the latest forecast, the central bank is expecting a 6.7 percent inflation rate at the end of this year. The National Bank also raised the benchmark rate, to 10.25 percent in August, from 9.5 percent at the end of March, and 7.5 percent at the beginning of 2008.