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Annual WB report 2010 : Romania, Bulgaria to make highest economic progress this year

Romania and Bulgaria, where the crisis struck later than in the other European Union countries, will see the highest progress as concerns this year's economic growth compared to 2010, shows the World Bank's EU10 economic report released on Tuesday in Bucharest.

'Romania is expected to be the leader by the economic recovery pace in 2012, compared to the other EU-10 states, with an economic growth estimated at 4.4 pct,' said WB senior economist and co-author of report Catalin Pauna. However, the document also stresses that the pace of economic recovery is still too low to generate new jobs and employment is below the pre-crisis level.

In its latest quarterly economic report, the WB said Romania's gross domestic product is estimated to increase 1.5% in 2011, from a contraction of 1.3% in the previous year. Lithuania is likely to post the most robust economic growth in the region this year, of 4.3%, followed by Slovakia (+4.1%) and Poland (+4%).

For the entire EU10 region, the lender estimates an economic growth of 3.1% in 2011 and of 3.8% in 2012.The EU10 includes Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia.

Romanian Leu Set to Firm vs Euro on Long-Term

Romania's leu is bound to strengthen against the euro on the long run, once living standards improve, Kaspar Richter, senior economist at the World Bank (WB) told MEDIAFAX Tuesday. Richter said short-term projects on the exchange rate are difficult, but the leu should follow an upward trend against the euro on the long-term.

The leu has lost a median 25% versus the euro since the crisis first hit at the end of 2008, reaching 4.2099 units in December last year. In its April economic report, the World Bank said Romania's leu has gained 4% to 6% in nominal terms against the euro since October 2010. However, real effective exchange rates remain 'visibly below pre-crisis levels,' the report noted.Tuesday, the leu closed 0.1% up against the euro at 4.086 units.

The World Bank estimated Romanian inflation will enter a downward path in the second half of 2011, once the effects of a 5 percentage point raise in the value added tax fade away.'In February 2011, inflation was highest in Romania, reflecting partly the impact of a VAT increase introduced in mid-2010, and is likely to decline in the second half of 2011,' the report said.

Sursa: http://www.actmedia.eu

Tags: economic euro highest bulgaria romania report

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