EIU Keeps Warnings On Romania’s Vulnerability To Intl Financial Mkt Turmoil

"The Central and Eastern Europe region has benefited from still-strong growth in the euro area, although some other countries, such as Romania and Bulgaria, have large external financing requirements and hence are vulnerable to changes in investor sentiment,” the EIU said in its latest global forecast.

According to EIU analysts, Romania is one of the counties in the region most vulnerable to financial market turmoil.

Romania also has a large gross financing requirement equivalent to around 30% of gross domestic product. Funding the requirement has been straightforward because of strong foreign direct investment inflows, but it will become more difficult as privatization revenue tails off, the EIU noted.

Another reason for concern is the Romanian leu’s recent depreciation against the euro, in which much of the country’s foreign debt is denominated.

EIU voiced similar concerns regarding Romania’s vulnerability to external turmoil in its previous global forecast.

The Romanian Forecast Commission, or CNP, sees the country’s current account deficit at 13.6% of GDP this year, from 13.9% of GDP in 2007.