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The current account deficit will grow to 15.3 pc in Romania, warns WB

The experts of the institution also say that the growth rate of the economy will register a downward trend at world level.

The current account deficit of Romania, compared to GDP, will continue to grow also this year reaching 15.3 per cent, from 13.9 per cent in 2007, warned yesterday the World Bank in the report “Prospects of the World Economy 2008.” According to the specialists of the institution, the negative balance of the current account should be 14.9 per cent of GDP in 2009. The Minister of Economy, Varujan Vosganian, pointed out at the end of the past year that the current account deficit will be a problem for the economy if it is not cut below 10 per cent of GDP until 2010. According to the Governor of the National Bank of Romania, Mugur Isarescu, the foreign direct investments will not be able to sustain for a long time this deficit, its decrease being conditional on the growth of competitiveness. On another hand, according to Rompres, the National Forecasting Commission said that the current account deficit will fall this year to EUR 18.35 bln, accounting for 13.3 per cent of GDP. The WB report also estimates that the economic growth rate registered by Romania will follow a steady downward trend from 7.7 per cent in 2006 to 6.1 per cent in 2007, 5.9 per cent in 2008, and 5.5 per cent in 2009. According to AFP, the trend is similar to the international one, the World Bank predicting a slowing down of the growth rate of the world economy from 3.6 per cent in 2007 to 3.3 per cent in 2008, although the latest predictions of the International Monetary Fund counted last year on a growth of the world GDP of 4.8 per cent in 2008. Moreover, the WB does not rule out the possibility for the American economy to go into recession on the background of the extension of the financial crisis, although it counts on a growth of GDP of 1.9 per cent. The specter of a recession in US, the depreciation of the dollar and the increased volatility of the financial markets are, according to the WB experts, risks which threaten the smooth landing of the world economy until the end of 2008. On the background of these evolutions, the economic growth of the Euro zone would be 2.1 per cent in 2008, over half a point less than in 2007. The growth of the Japanese economy would also return below the threshold of 2 per cent, with a growth of GDP of 1.8 per cent in 2008. However, unlike the rich countries which will register a growth of 2.2 per cent in 2008, the developing countries will have a growth of 7.1 per cent, estimates the World Bank. Thus, the growth of the economies of the developing countries will help to alleviate the impact prompted by the slowing down of the American economy. In order to reduce poverty, the report recommends these countries the technological progress. The economies from Central and Eastern Europe exposed to the overheating risks According to the same report, many of the economies of the countries from Central and Eastern Europe are exposed to the risks of overheating and the imbalances of the foreign payment balances, in the conditions in which they have the same creditors and investors. The WB experts state that if they are confronted with massive outflows of funds, these countries could be faced with a crisis similar to that from East Asia in 1997. According to the report, the first signs of overheating have already appeared in Bulgaria and the Baltic countries in 2007. In the area, the year 2007 meant the growth of inflation, especially because of the extensive draught from Romania and Bulgaria, of the growth of the internal demand and of the food and fuel prices. The economic growth from 1997 affected South-East Asia and Japan, further to the free floating of the Thai currency, conducting to the collapse of the economies from the area. Sursa: http://www.nineoclock.ro

Tags: world report according countries current economy account growth deficit romania euro

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