Although the IMF reduced the growth forecast for Romania’s main trade partners, anticipating a recession in the euro zone, the authorities insisted that the forecast for this year is mainly based on investments rather than exports.
The Government estimates the first quarter of this year will see higher growth than the fourth quarter of 2011, counting on the fact that the Finance Ministry paid a substantial part of arrears late last year, and on rising export orders.
The sources said the IMF, European Commission and World Bank mission reached an agreement with Romanian authorities on every issue, and made suggestions for amendments to certain laws. Therefore, mission chief Jeffrey Franks will announce Sunday the successful completion of the fourth evaluation of the deal signed in spring last year and will recommend the disbursement of a new tranche.
In January, the IMF slashed its forecasts for growth in the world’s economies, anticipating that the EU’s economy could shrink by 0.1% this year, dragged down by a 0.5% drop in the euro zone.
The European Bank for Reconstruction and Development revised downward its forecast for Romanian economic growth to 0.8% in 2012, from 1.1% previously, citing ripple effects from the euro zone crisis.
In a report last month, the World Bank revised downward its forecast on Romanian economic growth to 1.5% in 2012 from 3.7% previously, citing deteriorating external outlook and the country’s increased vulnerability to the euro zone crisis.
In November 2011, the European Commission revised its forecast on Romanian economic growth to 2.1% in 2012 from 3.7% previously, citing worsening conditions in EU markets. However, private consumption is poised to pick up in the second half of 2012, contributing 1.9% to the gross domestic product growth.