Fitch Revises Dn Romania’s 09 Econ Growth F’cast To 1%

Also, Fitch sees Romania’s budget deficit at 5% of the gross domestic product, or GDP, in 2009.

“In 2009 we forecast a GDP growth of 1%; a 4% inflation on average over the year; current account deficit of 11% of GDP; and a 5% of GDP fiscal budget deficit. However, our forecasts are subject to greater than usual uncertainty in current conditions,” Fitch Ratings director for emerging economies Andrew Colquhoun told MEDIAFAX.

Romania’s potential remains very strong, as a relatively large and still quite low-cost production base within the EU, he added.

“But the country is at significant risk of a currency and financial crisis that could damage the real economy and sovereign finances,” Colquhoun also said.

In November, Fitch analyst told MEDIAFAX that he estimated Romania’s economic growth at 8% in 2008 and 3% in 2009.

Romania’s new center-left government forecasts for next year an economic growth of 3.5%, a budget deficit of 1.7% of the GDP, while the current account gap should narrow to 10.5% of the GDP.

The Romanian economy is seen slowing down to below 4% next year, less than half compared with an estimation of above 8% in 2008, driven largely by higher vulnerabilities spurred by the international financial crisis, according to a poll made by MEDIAFAX among foreign and local analysts in November.

Both Fitch and Standard&Poor’s rating agencies downgraded in the past months Romania’s sovereign ratings to below investment grade.