EC Revises Up Romania's 2010 GDP Growth To 0.5%

The European Commission revised upward its forecast for Romania’s economic growth to 0.5% in 2010, a slight improvement from a zero growth rate previously envisaged, the Commission said in its autumn forecast Tuesday.

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"Real GDP growth is expected to turn positive by the first quarter of 2010 leading to a moderate 0.5% real GDP growth rate in 2010, gradually accelerating to 2.5% in 2011," the report said.

However, the Commission noted economic recovery will remain shallow, because of a "continued need for fiscal adjustment", reduced capital inflows and high jobless levels.

Romania's sharper-than-anticipated economic decline in the first half of 2009 has resulted in a significant decline in government revenue, the report said. The Commission envisages the country's budget deficit will deteriorate to 7.8% of the GDP this year, from 5.5% in 2008.

For 2010, the Commission predicted Romania's budget deficit will "decline only marginally" to 6.8% of the GDP.

Both predictions, however, are premised by Romania's ability to implement a series of economic and fiscal measures aimed at slashing public spending.

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