Romania's Econ Growth To Remain Negative In Next 2, 3 Q – IMF

Franks added that a severe drought this year would have a negative effect on the GDP, but especially on the social side, on small farmers.

IMF's mission chief to Romania stated that there is no need for revising the quarterly budget deficit target yet, due to the economy decrease beyond expectations in the first quarter of the year.

The IMF official said that 2009 will be a difficult year, even after signing the agreement, but also mentioned certain positive results, such as the risk premium cut and a lower pressure on the exchange rate.

According to Franks, the unemployment rate will increase this year, in the light of the recession.

Romanian first quarter gross domestic product shrank by a seasonally-adjusted 2.6% compared with the fourth quarter of 2008, and was down 6.4% against the first three months of 2008, in unadjusted data.

The International Monetary Fund official forecasts on Romania see the gross domestic product contracting by 4.1% in 2009, while the European Commission forecasts a contraction of 4%.

For 2010, both IMF and EC see a 0% GDP growth.

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