Thursday, September 5, 2013

AFP: Romanian recovery speeds up as emerging Europe rallies

The Romanian economy grew faster than thought in the second quarter of the year, official data showed on Wednesday, in line with a general improvement in the central Europe region.

The economy grew by 0.5 percent in the quarter, revised data from the national statistics agency said, instead of by 0.3 percent as estimated previously.

This meant that in the first six months of the year, the economy grew by 1.8 percent from the figure at the same time last year, following an IMF-EU rescue programme.

Analysts keep a close watch on the east and central Europe region, of which Romania is a part, since it constitutes what they class as emerging Europe, a gateway to the European Union, Russian and central Asia economies, and has attracted investment for this reason.

Many emerging markets, notably in Asia and South America have been hard hit by the prospect of a tightening of monetary policy in the United States. However, analysts say that emerging Europe, with the exception of Turkey, has so far largely escaped this and has a good chance of building on its broad, if uneven, trend of recovery.

In June, Romanian industrial production grew by 5.7 percent from output in May, to show the second-biggest increase in the European Union after output in Ireland.

Romania was stuck in recession in 2009 and 2010, but began to recover in 2011 with the help of emergency help of 20 billion euros ($26.4 billion) from the International Monetary Fund and the European Union. This rescue package was conditional on the introduction of draconian austerity reforms.

In July, the IMF revised up its outlook for Romania's growth this year from 1.6 percent to 2.0 percent and estimated that the economy could grow by 2.25 percent in 2014.

A critical factor for recovery of the economies in central Europe is the nascent recovery in the eurozone which is a vital export market for them.

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