A 1.5% GDP Growth In 2010 Seen Healthy For Romania - BRD

"I am aware of the forecasts for a growth of 2%-3%, maybe even 4%. I'd settle even for an increase of 1%-1.5% in 2010, as it would indicate a recovery and a health growth," said Florian Libocor, chief economist at BRD.

Libocor said Romania will lag behind European Union states for a good part of the year, but it will end 2010 with a double growth compared with EU average, which is estimated at 0.7%.

Romania's industry is forecast to grow by 1% year-on-year in 2010, while trading activities are seen rising 2%. However, the construction sector is likely to fall 5% on the year, according to BRD officials.

Local demand is seen picking up 2.3% on the year.

For 2011, BRD expects the economy to grow by 3% on the year, with all major sectors poised to recover.

Political stability, the continued International Monetary Fund and EU funding, as well as rising exports and the adjustment of Romania's current account deficit are key factors pointing toward economic growth in 2010, BRD said.

On the other hand, downward pressure may arise from a growing insolvency, shortage on the labor market, insufficient EU fund absorption and the underground economy.

The Romanian authorities forecast an economic growth of 1.3% in 2010, from a 7.2% decline a year earlier.

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