Romania Economy Falls Hard On Worse Than Expected 4Q Data

02.12.2010 ZF English

Romanian economy declined 7.2% on the year in real terms in 2009, following a larger-than-expected quarterly contraction in the fourth quarter of the year, a flash estimate of the National Statistics Institute, or INS, showed Friday.

In the fourth quarter, the country's gross domestic product shrank by a seasonally adjusted 1.5% compared with a quarter earlier, INS said.

Compared with the fourth quarter of 2008, the GDP fell 6.6% in real terms during the last quarter of 2009.

The data put a dumper on speculations about a revival in the fourth quarter of last year. The analysts polled by MEDIAFAX estimated the GDP would grow by as much as 1.5%-2% in the fourth quarter compared with the previous quarter, easing the full-year contraction to 6.6%-7% in 2009.

In 2008, Romania was one of the fastest-growing economies in the European Union, after posting a record increase of 7.1% on the year. However, the country's GDP has been falling ever since the fourth quarter of 2008.

For 2010, the Romanian authorities estimate an economic growth of 1.5%. The International Monetary Fund, which is leading a EUR20 billion bailout loan to Romania, forecasts a 1.3% growth for this year, followed by a speedier recovery in 2011.

The IMF said it expects Romanian economy to return to growth as early as the first quarter of 2010.