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An aswer to whether recession has gripped Romania or not

Without getting optimistic, Romania has not been and will not be gripped by recession, despite what some analysts might be saying, says Constantin Chirica, deputy director of the National Bank of Romania (BNR), the Statistics Department, in a commentary dubbed 'Is Romania in recession?' carried by Romania libera daily.

Bucharest, Dec 12 /Agerpres/ - Without getting optimistic, Romania has not been and will not be gripped by recession, despite what some analysts might be saying, says Constantin Chirica, deputy director of the National Bank of Romania (BNR), the Statistics Department, in a commentary dubbed 'Is Romania in recession?' carried by Romania libera daily.

Chirica is grounding his analysis on the study of the economic and social situations, since 1990 up to the present, as supplied by the official statistics.

According to the analyst, Romania has seen, in two separate occasions, 'the type of recession termed as economic depression', namely, between over 1991-1992 and 1997-1999.

'Official statistic data confirm, in the first analyzed interval, major negative growth rates of the main economic indicators - GDP, industrial output, real revenues from salaries and annual average inflation rate - in both 1991 and 1992,' Chirica points out.

According to him, after a four-year period of economic consolidation, annual growth rates were recorded over 1993 -1996, when Romania entered an economic depression for the second time. Industrial output had negative annual growth rates between 1997 and 1999. The GDP nosedived by the year, with negative growth rates of 11.7 percent in 1999 against 1996.

The analyst says that, through Romania has taken on 'an uninterrupted economic growing path' as of 2000, the negative influence of the two deep economic crisis were felt until 2003.

As of 2004, the GDP went up each year, reaching, in 2007, a positive growth rate by 27.4 percent higher than in 1990. Consequently, Romania's situation has greatly improved. Calculated in euro, the DGP totaled in 2007 over 121 billion euro, double as compared to 2004 and 68 billion euro more than in 2003. The 8.8 percent economic growth registered over January-September 2008 sets the premises of achieving a GDP of 137 billion euro in 2008. Direct foreign investment in Romania accounted, at end-2007, for 42.8 billion euro, some 33 billion more than in early 2004.

Analyst Constantin Chirica has also said that the high foreign deficit is a reality (13.8 percent of the GDP in 2007) but the analysis on sectors shows a quality increase, with imports for production (85 percent of total imports) having an important contribution. Moreover, the quick increase in exports that bring in foreign currency as compared to imports (exports exceeded imports by 3.1 percent over January-October 2008) will decrease the foreign deficit. For 2007-2008 the analyst sees a significant funding of the current account deficit through direct foreign investment of (43-45 percent). The average annual inflation rate will enter a downward path, to its 2007 level, while unemployment rate event if slightly higher, will be expressed in one figure as before.

Given the situation, the analyst believes there will not be recession in Romania and the current level of flat tax and labor force cost (much smaller in Romania against other EU countries) are decisive elements for a further attraction of direct foreign investment. In Chirica's opinion, investors will prefer countries with economic growth potential, such as Romania, and, in the circumstances of an economic and fiscal policy that favors development, GDP next year will register a positive growth rate even if at a slower pace.

 

Sursa: http://www.rompress.ro

Tags: romania economic percent euro billion foreign growth analyst chirica recession gripped bnr

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