Moody’s Ups Romania 2010 GDP Forecast To 2.3% Vs 1.2%

"Exports have stabilized and domestic liquidity has eased over the past few months, which should support the economic recovery later this year," Moody's said in a report Tuesday.

However, the ratings agency warned the recovery may be "sluggish" for several years, influenced by slower growth in the main European economies and the weak credit development on the local market.

Moody's envisages Romanian budget deficit will reach 6.3% of the gross domestic product in 2010, from an 8.3% of GDP deficit predicted for last year, and estimates the current account gap will be at 3.5% of GDP by year-end.

In addition, the ratings agency sees Romanian inflation rate at 3.5% end December, compared to 4.7% in 2009.

Romanian authorities forecast an economic growth of 1.3% in 2010 and pledged to bring the budget deficit down to 5.9% of GDP by year-end.

According to central bank's estimations, the annual inflation will reach 2.6% end-December.

Moody's is the only major ratings agency that hasn't downgraded Romania to junk. The agency rates Romania at "Baa3", with a stable outlook.

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