Deutsche Bank estimates Romania's GDP drop at just 5.1 pct

The German bank analysts think that the International Monetary Fund (IMF) estimation, of an economic decline of 8-8.5 percent, is much too pessimistic.

Deutsche Bank further stakes on Romania's economic growth recovery, starting the third and fourth quarters of 2009. By comparison, Romania's National Prognosis Commission predicts an economic growth in the second quarter of 2010 at the earliest.

For 2010 CNP forecasts a GDP rise of 0.5 percent, whereas Deutsche Bank sees the economy advancing by 4.5 percent.

The German experts underlined that industrial production and retail data start looking better. An important factor in the breaking industrial production downfall is represented by Dacia automaker. Yet, given that the real wage is dropping, the unemployment rate is on the rise, the domestic demand is expected to stay on the minus. But there is a positive side because a drop in domestic demand leads to shrinking imports. And such a decline means a lower current account deficit. Less money enter and exit, but also the need for external financing is also tempered, Business Standard also reports, quoting the German bank.

In practice, Romania's economy is now in a more favorable context also because the external financing need is much lower as against this year-start. In percentage, the current account deficit is appreciated by the German experts at approximately 5 percent this year, less than half the value recorded last year (12.3 percent of the GDP).

Deutsche Bank also comes up with a series of reasons which might influence the budget deficit evolution. Parliamentary support for the unified wage law in the public sector, state agencies restructuring and education laws are seen as a good omen by the bank analysts and could have a positive impact upon the fiscal deficit. In exchange, the presidential elections could slow down the diminishment process of the budget expenditure, Business Standard also reads.