Wednesday, June 17, 2009

Central Europe, Romania Show Symptoms of Global Crisis


By Gina Neagu
Epoch Times StaffJun 16, 2009

A survey of nine European countries found that half the population has been affected by the economic crisis, according to a monthly GFK study.The country to suffer most is Hungary, where over 70 percent of respondents consider their family financial situation worse. Among the least troubled was Austria, with only 30 percent of the population reporting they were affected by the crisis.

Four of ten Romanians’ incomes were affected by the economic crisis.

The situation in Romania is comparable to that in the Czech Republic and Bosnia-Herzegovina, where over 60 percent of respondents reported barely being able to cover expenses. Less than a fifth were able to save money.

Bucharest’s population is the least affected by the crisis, with only 18 percent reporting an impact. Among the worst affected by the current climate are entrepreneurs, small businesses, and freelancers, with two thirds reporting income shrink. Nine percent of the 1,000 Romanians interviewed pointed to a drop in salary, and accused employers of late payments.

The unemployment rate grew to 5.8 percent in May, from 5.7 percent in April 2009. The rate was 3.7 percent in April 2008.

According to an official forecast published today by the Merrill Lynch Bank of America Securities, Romania's current account deficit will reach five percent of GDP in 2009, and not the eight percent of initial estimates.

However, Romania's economy is forecast to drop significantly in 2009 and 2010, by 6.4 percent and 2.5 percent due to fiscal adjustments required by an IMF agreement. Merrill Lynch analysts consider that the inflation rate this year will exceed the estimate of 3.5 percent put forward by the Romanian Central Bank, due to external pressures and depreciation of the national currency.

Romania's inflation could reach 5.2 percent in 2009, and 4 percent in 2010. It was 6.3 percent at the end of 2008.

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