Romania’s Economy Seen Growing 7.5% In 1Q – Fin Min

Romania’s economy is seen growing by 7.5% in the first quarter of 2008 compared with 6% growth in the same period last year, on higher output in the construction and services sectors, Romanian Finance Minister Varujan Vosganian said Monday during a press conference.

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“We might revise our year-end growth forecast by one percentage point to 7.5% from 6.5%,” Vosganian said.

In the first quarter, Romania’s fast-growing construction sector expanded by 32% compared with 30% in the same period last year, while services grew a robust 7.6% by the end of March, Vosganian added.

Romania’s economic growth has been robust in recent years, increasing an average 6.5% each year between 2003 and 2006. In 2007, the country's economy grew 6% on the year in real terms, a slowdown compared with 7.9% a year earlier.

Vosganian also said the country’s consolidated state budget posted a surplus of 0.14% of gross domestic product in January-April, slightly down from his previous four-month surplus estimate of 0.2% of GDP announced last week.

The latest finance ministry data indicate Romania’s state budget posted a surplus of 0.02% of GDP in January-March, compared with a 0.12% deficit in the corresponding period a year earlier.

For 2008, the Romanian government is targeting a budget deficit of 2.3 of GDP, but the European Commission sees it at 2.9% of GDP by yearend, according to its latest spring forecast.

“The commission is worried about potential pressures on the budget this election year, hence the gap between the figures,” Vosganian said, adding the European body has every right to be cautious.

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