GEA’s Liviu Voinea: Double-digit plunge for Romanian economy in 2009

Romania cannot avoid a double-digit economic recession, even if the National Projection Commission (CNP) „battles” the economic setback inclusively by forging higher than real growth rates, executive director of the Group for Applied Economics (GEA) Liviu Voinea on Monday told the public radio station.

„We cannot bypass a double-digit recession. Just think mathematically: in Q3 2008, growth has been 9 percent. A stagnation in Q3 this year would actually mean a plunge of minus 9 percent from last year. But a decrease of minus 7 – 8 percent compared with plus 9 percent last year actually signifies a double-digit recession,” said Liviu Voinea.

The cited expert also considers that inflation is artificially held in check, as he correlates INS reports, which he considers to be unrealistic, with CNP forecasts.

„Why certainly, just as the Romanian Statistics Institute (INS) is the only body in Romania to effectively fight inflation, because it reports smaller inflation rates, the Projection Commission too fights recession by forcing higher than real economic growth rates,” Voinea said.
„I do not believe that the 12-month economic decline will be just 7.7 percent, as has been recently said,” warned the GEA executive director.

He believes that recession will be steepest for July, August and September. „Recession will hit bottom in Q3, because last year it also peaked in Q3. In my opinion we will experience a double-digit recession,’ said Voinea.


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