Romania Econ Growth Seen Below 4% In ‘09 From 8% In ’08 – Analysts

The analysts forecasted an 8.7% growth for the first nine months of the year, with the rate to slow down to 6.3% in the fourth quarter.

 

In 2009, however, annual growth forecasts range between 3% and 4%.

 

Moody’s analyst, Kenneth Orchard went further and anticipated a recession in Romania and a 0.3% annual economic growth.

 

Orchard said exports in Romania will slow down next year due to the economic downturn across the EU and that the global liquidity shortage will limit capital inflows to the country, affecting local consumption and investments.

 

Romania will see a recession in 2009, despite big public expenses, a budget deficit of 5% of the GDP and the widening of the public debt to 16.2% of the GDP, the Moody’s official said.

 

Andrew Colquhoun, director with Fitch Ratings agency, said in his turn that Romania’s GDP will slow down in the first quarter of 2009, but that this will not lead to a recession.

 

Colquhoun said Romania will see an 8% economic growth in 2008 that will roughly fall to only 3% at the end of next year.

 

Bartosz Pawùowski, analyst for emergent markets with London TD Securities, gave similar forecasts for Romania’s economic growth. 

 

He said the 5-6& growth rate in the fourth quarter of 2008 will depend on lending availability and will be mainly supported by consumption inertia.

 

Romanian analysts, tough slightly upbeat compared to foreign ones, revised downward their estimations for the growth rates in the fourth quarter as well.

 

“The third quarter might be very good, but the last one will be worse compared to what we have got used to this year (…). Even so, the fourth quarter will be fabulous considering the rest of the region,” said Lucian Anghel, chief economist of Romania’s largest lender Banca Comerciala Romana, or BCR.

 

 “The main elements that fueled the economic growth in the third quarter, which we see at 9%, should be agriculture, constructions and services. The industry slowed down quite much, so its contribution will probably be down as well for the period July-September 2008,” Raiffeisen Bank Romania chief economist, Ionut Dumitru said.

 

Romania’s Prognosis Commission expects a gross domestic product of 9.1% at the end of 2008 and 6% in 2009.

 

Romania reported an economic growth of 8.8% in the first half of the year, driven by 9.3% growth in the second quarter, following a good agricultural year.