GDP decreases by 0.3 percent in real terms in first quarter

The gross domestic product decreased by 2.6 percent, gross series, and by 2.5 percent, seasonally adjusted series, in the first quarter of 2010 as against the same span of time in 2009, according to the first estimates made by the National Institute of Statistics (INS).

The gross domestic product in the first quarter of 2010 went down by 0.3 percent in real terms as against the one registered in the last quarter of 2009. According to the representatives of the International Monetary Fund, Romania will have a zero or even negative growth in 2010.
Romania will have a zero or even negative growth in 2010 and without some measures being taken, the public deficit might be 9.1 percent and will turn unsustainable.

We have agreed on a deficit accounting for 6.8 percent of the GDP, said head of the IMF delegation Jeffrey Franks on Monday at the end of the assessment mission in Bucharest. Romania’s economic growth in 2010 has been revised downwards by the IMF, from 1.3 percent in late March to 0.8 percent in mid-April and to minus 0.5, down to 0 percent, at the end of the assessment mission of May 10.

The relaunch made us wait for it long because of the slow increase of Romania’s economic partners, but also because of the decrease in the domestic demand, explained Jeffrey Franks. The chief of the IMF mission also said that the slow recouping affected fiscal accounts and caused fiscal pressure, even if the targets of the stand-by agreement were achieved in the first quarter of the current year.

The data revised by INS referring to the GDP for 2009 indicated a 7.1 economic decrease as against 2008 and a GDP amounting to 491.273 billion lei in current prices. Under these circumstances Romania’s budget deficit for 2009 is 7.4 percent of the GDP. The gross domestic product estimated by the Ministry of public Finance was 505.503 billion lei.

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