Romanian Analysts Mixed On Economic Development In 2011

„I estimate a decline of 2% in 2011. It’s highly probable we’ll witness new fiscal adjustments in the first half of next year and the public sector will be at least affected by layoffs, most likely at a faster pace than now (in 2010 – e.n.),” said Nicolaie Chidesciuc, chief analyst at ING Bank Romania.

Speaking at an event organized by financial daily Ziarul Financiar, Chidesciuc said he doesn’t expect an increase in domestic consumption until the second half of 2011.

Ionut Dumitru, chief economist at Raiffeisen Bank, rejected Chidesciuc’s gloomy scenario, saying the economy is expected to grow by 1% to 2% in 2011.

With no additional fiscal measures anywhere in sight and based on government promises for no more tax hikes or salary cuts next year, Dumitru said an economic contraction is highly unlikely next year.

In fact, had the government made the fiscal adjustments last year instead of 2010, Romania’s economy could have already returned to growth by now, he added.

Romanian authorities estimate an economic contraction by 1.9% this year, after a decline of 7.1% in 2009.

For 2010, the government predicts a growth of 1.5% to 2%, propelled by exports and a pickup in domestic consumption.