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EC Cuts Romania’s 09 GDP Growth Forecast To 1.75%, From Previous 4.75%

The European Commission cut sharply its forecast regarding Romania’s economic growth in 2009 from 4.75% previously estimated at 1.75%, due to a sharp reduction of credit growth, weakening confidence indicators and worsening labor market conditions.
EC Cuts Romania's 09 GDP Growth Forecast To 1.75%, From Previous 4.75%
19 ian. 2009, 13:14, English

In 2008, Romania’s economy grew by 7.75%, according to EC’s estimations.

EC also sees a slowdown in Romania’s GDP growth in 2010, to below 2.5% from 5% previously predicted.

“The domestic demand boom, which has been the main engine of growth over the past five years, is expected to ease significantly on the back of a sharp reduction of credit growth, weakening confidence indicators and worsening labor market conditions,” EC said Monday.

According to EC’s estimations, the sharpest decline is expected in investment (both construction and equipment) growth, which is projected to drop from 18% in 2008 to roughly 1.5% in 2009.

Moreover, private consumption is set to slow down from 8% in 2008 to just below 2% in 2009.

According to EC’s previous forecast on November 11, 2008, Romania’s GDP was seen slowing to 4.7% in 2009, against an estimated 8.5% growth in 2008, and to pick up slightly in 2010 to a 5% growth.

Romania’s National Prognosis Commission last predicted a GDP growth of 9.1% at the end of 2008 and 6% in 2009.