Romanian Econ Revival Hindered By Lower Invest, Population Ageing

„Moreover, the impact of the economic crisis will coincide with the negative effects of demographic ageing on potential output and the sustainability of public finances,” the Commission said.

It said the authorities in Bucharest must speed up implementation of structural reforms to support potential economic growth, which should also help restore finance sustainability.

„In particular, for Romania, it is important to adopt and implement the draft pension reform as well as the fiscal governance and structural reforms foreseen in the balance-of-payments support program with the European Commission,” the report noted.

Also, the Commission recommends concrete measures aimed at a swifter absorption of EU structural funds, as it would allow increasing investment in long-term growth without endangering the achievement of the agreed budget deficit targets.

The Romanian authorities forecast an economic growth of 1.3% in 2010, after a sharp contraction of 7.1% a year earlier.

In 2012, the Romanian economy is estimated to grow by 3.7%.

In March last year, Romania agreed with the European Commission, the International Monetary Fund and other international lenders on a EUR20 billion financial package.

EU’s executive arm will provide EUR5 billion under the agreement from its balance-of-payments support facility.