Analysts See Romania's GDP +1.2% In 2011, Inflation At 4.3%

The government and the International Monetary Fund see Romania's economic growth at 1.5% in 2011, after a decline of some 2% last year.

The Eastern European country's central bank estimates the inflation at 3.4% in December 2011, after a surge to 8% in 2010.

All polled members of the AAFBR expect an increase in Romania's gross domestic product after two consecutive years of economic contraction. Their estimations vary between 0.2% and 1.7%, with the median at 1.2%, the association said in a statement.

The inflation rate is expected to decrease this year, with forecasts ranging between 4% and 4.8%.

As regards the key monetary policy rate, all but one analysts forecats a reduction from the current 6.25% a year. The average estimation is a reduction of 0.5 percentage points to 5.75%.

"Keeping the budget deficit in the limits agreed with the IMF and the European Commission is regarded with skepticism by most respondents, which are seeing a deficit of 5% of the GDP, compared with the target of 4.4% of GDP," the statement reads.

However, all analysts are expecting a significant reduction in the government deficit.

Analysts predict the current account gap at 5.5% of the GDP, while foreign direct investment might rise to EUR3.5 billion in 2011.

The Romanian leu is seen as mostly stable versus the euro throughout the year, with a small appreciation tendency. Therefore, the leu might close 2011 at around 4.2 to the euro, with estimations ranging between 4.05 units and 4.3 units.

Private lending is expected to gain some 5.9% in 2011, while non-government deposits are seen up 5% this year.

According to the polled analysts, companies listed on the Bucharest stock exchange will have a favorable evolution, as the BET index is seen up 12% from the current level, while BET-FI, the index that tracks the five regional investment funds, or SIFs, is estimated to rise 28%.

AAFBR was founded in January 2008 and it includes more than 60 financial analysts.

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