“In Romania, a recovery finally appears to be underway after two years of negative growth and the economy is expected to return to modest positive growth rates this year,” EBRD said in its latest Regional Economic Prospects report
It said exports are growing strongly, industrial production was up more than 7% in May 2011, “and even the construction sector is starting to turn around.”
However, Romania’s new precautionary agreement with the International Monetary Fund, which entails further austerity measures, is likely to dampen the recovery in domestic demand, the report noted.
The bank said the southeast Europe lags behind other regions in terms of economic performance, with the exception of Turkey, where growth continues at a rapid pace.
“Significant risks stem from potential contagion effects from the Greek debt crisis. So far, spillovers have been contained but they have the potential to disrupt economic activity in the region if the situation in Greece deteriorates further,” EBRD said.
For 2011, EBRD expects the economy will pick up to 2.3% in the region, up from a growth of 2.2% previously predicted.
EBRD’s forecast for the southeast Europe covers Romania, Bulgaria, Albania, Bosnia and Herzegovina, Macedonia, Montenegro, Serbia Turkey.