“With the eurozone slipping into recession this year, the Romanian economy will most likely come to a standstill in 2012. Since downside risks have begun to materialize, we have revised our 2012 growth outlook down to zero, from a previous 0.7%,” Erste said.
The Romanian economy contracted at an annualized rate of 0.6% in the third quarter, a flash estimate of the country’s statistics institute INS showed earlier Thursday. For the first nine months of 2012, Romanian gross domestic product grew by 0.2% year-on-year.
“We assume that agriculture was the main drag on GDP in the third quarter of 2012 and that the recent deterioration seen in industrial output and construction added to an already grim outlook, Erste said in its report.
The Austrian lender revised downward its forecast on Romania’s 2013 growth to 1.1%, from 1.9% previously, due to a bleaker outlook on the eurozone economy.
“The European Commission has already pared back the 2013 economic growth for the eurozone to almost zero (+0.1%). This has led us to slash the growth forecast (in Romania) for next year to 1.1%,” Erste said.