EIU Cuts Romania GDP Forecast To -1.2% In 2010

The Economist Intelligence Unit (EIU) has revised down its forecast on Romanian economy to minus 1.2% this year, from a decline of 0.6% previously, according to an EIU report.

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"Romania faces tough austerity measures, and the economy will contract by 1.2% this year, before returning to growth in 2011," EIU said in its latest global economic outlook report.

The think-tank also warned that resistance to wage and pension cuts could lead to political instability.

The EIU also cut its forecast for the Balkan states to minus 02% in 2010 from a growth of 0.4% previously. For 2011, it estimates an economic growth of 3.1%, slightly lower compared with 3.3% initially predicted.

Worldwide, the EIU expects an economic growth of 4.4% this year and of 3.6% in 2011.

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