Monday, July 20, 2009

Forecast: Romania 2009 GDP to drop 7 pct

BUCHAREST, Romania, July 17 (UPI) -- Romania's 2009 gross domestic product could drop more than 6 percent due to declining investments and consumption, an economic rating agency analyst said.

Adding his dark predictions, Romanian Finance Minister Gheorghe Pogea has said the country's economy might decline for all of 2009 by 6.5 percent to 7.1 percent, and not 4.1 percent as it was expected in March, the Bucharest Web site reported Friday.Marko Mrsnik, Standard & Poor's analyst, said the Romanian government needs to consolidate the state budget and its fiscal policy and keep its budgetary deficit close to a 4.5 percent threshold of GDP as set by the International Monetary Fund.

Mrsnik warned Romania's budgetary deficit could reach 6.2 percent of GDP.Lacking revenues, the Romanian government could look for financing from local banks, which are run by their foreign owners. Mrsnik warned banks, fearing risks, could change their lending strategy.Tonny Lybek, an IMF official in Bucharest said Romania's economic situation is getting worse and the country's 2009 GDP drop, forecast at 4.1 percent in March, should be revised.

Lybek said IMF's new forecast for Romania's 2009 GDP will be announced early in August.

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