Roubini: Romania To See Slow, U-Shaped Economic Recovery

05.26.2011 By Florentina Dragu

Romania's economy is experiencing a slow, U-shaped recovery which should gain momentum with aid from structural reforms, US economist Nouriel Roubini said Thursday in Bucharest.

Roubini, an economics professor at the New York University, told a seminar in Bucharest that Romania shouldn't experience any spillover from Greece, provided it continues the reform process.

He said some of the harsh measures adopted during the recession have already started to bear fruit, but stressed the adjustment process must continue.

Roubini said the central bank made the right decision in keeping its key rate unchanged at the recent monetary policy meetings, because a different decision would have stimulated even more the inflow of foreign capital or would have deepened inflationary pressure.

The central bank kept its main rate unchanged at a record low 6.25% for the eighth straight time in May. The bank also froze the minimum reserve requirements at 15% for Romanian-leu denominated liabilities and at 20% for foreign currency liabilities.

Romanian economy expanded by 0.6% in the first quarter, after a recovery of just 0.1% three months earlier. Preliminary adjusted data showed the first-quarter gross domestic product increased by 0.3% from the same period of 2010. In unadjusted data, the annual growth was 1.6%.