EBRD improves outlook on Romania's economy

In Romania's case, the EBRD upgraded its estimates of the country's Gross Domestic Product (GDP) for 2010 - when the GDP should now report a 2-percent contraction instead of a 3-percent contraction as predicted in July - and also for 2011, when Romania's GDP should advance 0.9 percent, instead of a previously predicted 0-percent growth.

'In Romania, the government has managed to remain on course with the IMF programme by implementing harsh austerity measures that will keep the fiscal accounts under control. However, the Romanian economy seems certain to decline again overall this year before returning to modest growth next year,' reads the EBRD report.

According to the EBRD estimates, after a 0.3-percebnt growth in Q2 2010, the Romanian economy slipped back into negative territory in the third quarter, when the GDP declined 0.5 percent, a level where it is predicted to stay in the last three months of 2010 as well.

The EBRD's latest report predicts overall growth in the EBRD region of 4.2 percent in 2010 and 4.1 percent in 2011, compared with a July prediction of 3.5 and 3.9 percent, respectively. The region as a whole contracted by 5.5 percent last year.

Commenting on the outlook, Chief Economist Erik Berglof said: 'This is precisely the time that the process of structural reform needs to be accelerated to strengthen productivity, underpin fiscal sustainability and shift countries towards a more balanced growth model. There is no room for policy complacency.'