Thursday, March 3, 2011

Romania Economic Decline Slowed in Fourth Quarter on Exports

Romania’s economic decline slowed in the fourth quarter of last year as growing exports and higher industrial and agriculture output offset a slump in consumption.

Gross domestic product dropped a final 0.6 percent from a year earlier, compared with a 2.5 percent fall in the third quarter, the National Statistics Institute in Bucharest said today in an e-mailed statement. The contraction, which matched the preliminary figures published on Feb. 15, is smaller than a forecast for a decrease of 1 percent in a Bloomberg survey of seven economists.

Romania, the European Union’s second-poorest country after Bulgaria, is struggling to recover from its first recession on record as the government pushes through austerity measures to qualify for payments from a bailout. The country is seeking a new two-year precautionary agreement worth as much as 5 billion euros ($7 billion) from the International Monetary Fundand the EU to safeguard against potential effects from Europe’s sovereign-debt crisis.

Romania’s recession erased the country’s 2008 economic expansion, when a credit-fueled consumption boom made it the EU’s fastest-growing nation. Demand dropped an annual 1.2 percent and construction output plunged 7 percent last year, the statistics office said. Agriculture output rose 7.4 percent and industrial production grew 5.8 percent.

The government expects growth of as much as 2 percent this year and 4.5 percent in 2012, Prime Minister Emil Boc said on Feb. 7. The administration is facing growing public opposition to austerity measures as it has pledged to narrow the country’s budget deficit to 3 percent of GDP in 2012 from 6.5 percent last year.

To contact the reporter on this story: Andra Timu in Bucharest at atimu@bloomberg.net.

To contact the editor responsible for this story: James M. Gomez in Prague atjagomez@bloomberg.net

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