Romanian 2011 Economic Growth Closer To Zero – Ctrl Bker

"Romania faces big risks of fiscal instability, which could alter economic growth. Another influential factor is the high employment in the public sector (…). Even if we've managed to solve the issue of public salaries for now, the problem is still there and will resurface unless we deal with the overcrowding in the public sector," said Lucian Croitoru, adviser to central bank's governor Mugur Isarescu.

Croitoru said Romania faces even a bigger risk on the political scene, because the next four years are election years and the political campaigns may weaken fiscal discipline.

"2011 is a key year for Romania, as the country must implement its assumed reforms successfully to prove it is the right market for investors and that it offers relatively high yields and macroeconomic stability. For that, it is important we close a new deal with the International Monetary Fund," the central bank's official added.

He said economic recovery is likely to be slow, with manufacturing being the only industry sector that shows signs of recovery.

"Things in the other sectors don't look as good," Croitoru added.

However, the overall economic development in 2011 will be positive, despite uncertainties in the first half of the year.

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