Romania Most Pessimistic About Economy, Finances In Emerging Europe – Survey

In its latest regional outlook report on Europe, the Washington-based institution noted the Romanians are also most gloomy regarding unemployment projections for the next 12 months.

The IMF said some of the emerging Europe countries have been hit harder by the recession, because they’ve experience not just a decline in exports, but also a collapse of domestic demand, as the credit-fueled domestic demand boom of the precrisis years came to a sudden end.

„Such countries include Latvia, Bulgaria, Croatia, Estonia, Lithuania, and Romania. In contrast, countries that had the mildest downturn are now seeing the strongest recovery,” the report noted.

Romania will continue to experience weak consumption, restraint by poor labor market conditions, low confidence, and the destruction of consumer wealth, the IMF said.

The IMF forecasts Romanian economy will decline 1.9% in 2010, the second deepest recession in the European Union, after Greece, whose economy is expected to contract by 4%.

For 2011, the IMF estimates a modest recovery of 1.5%, the weakest growth rate in the central and eastern Europe.