Economic growth "will reach 1.5 percent in 2011"

The IMF mission chief in Romania, Jeffrey Franks, has declared that Romania’s economy starts to recover and resume its growth, which will get about 1.5 percent in 2011, supported by strong trading and the progressive improvement in demand.

"The macroeconomic environment remains in general as we anticipated last time. We have not made important changes concerning the projections. We see clear signs that the economy has begun to recover and resumed its growth. This is supposed to reach about 1.5 percent in 2011, supported by a strong trade and a gradual improvement of domestic demand. The growth is expected to become wider in 2012 and will rise to 3.7 - 4 percent", Jeffrey Franks said.

Jeffrey Franks expects the inflation rate to grow over the 5 percent level forecast by central bank.

The sustainable economic growth together with the investment increase and work places are on the forefront of the objectives, according to the chief of IMF mission.

We expect that towards the end of 2011 the inflation should be above the 5 percent estimated by NBR. National Bank must keep itself vigilant against a new wave of inflationary pressure and it could be forced to adjust its policy for the following months in order to reach the inflation target in 2012", the IMF official said.

Most investments with public spending must remain within the anticipated forecast, and the European financed projects must be completed by the end of the year, Jeffery Frank also said.

The budgetary deficit target of the first trimester has been aimed, leaving the target of 4.4 percent of GDP easy to reach for the following year.

"The target of 3 percent deficit in 2012 will be a challenge and it is essential to withstand the political pressure to increase spending or lower taxes before improving the cost control and fiscal management to produce results", Jeffery Franks also stated.

Translated by: Cătălina Virvescu
MA Student, MTTLC, Bucharest University