BCR analysts: If 2008 is a good farm year, Romanias economic growth may reach 7pc

Romania’s economy may grow this year in excess of 7 percent, compared with 6 percent in 2007, if the trends from early 2008 continue into the year and the farm year is a good one, say analysts of the Banca Comerciala Romana (BCR).
In a macroeconomic bulletin released on Wednesday based on Q1 2008 figures, BCR analysts say economic growth in Romania could be even more than 7 percent if Government receipts exceed projections, high growth in the construction industry is kept going, industry advances slightly and the farm year turns out a fat one.
The BCR report comprises the most optimistic economic growth estimates so far this year, after the National Economic Projection Commission (CNP) one week ago affirmed the official economic target at 6.5 percent, in its preliminary spring report.

Q1 2008, the BCR analysts say, could be the best as far as economic growth in 2008 is concerned, because of the basic effect of a strong increase in the Government receipts collected, which is reflected on the Gross Domestic Product (GDP).
They say the year started well for the economy, with industrial production, construction and retail trade having outperformed expectations, the same as the average industrial wages and receipts collection did. Exports also continued to grow and exceed imports for two months in a row, thus significantly reducing Romania’s foreign trade and current-account deficits.
On the other hand, inflation bounced up to almost 8 percent at end-February and the local currency, the leu (RON) continued to fall in value against the single European currency, to an exchange rate of RON 3.69 to the euro, which is 9 percent lower for the RON than in Q1 2007.
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