The country’s government was replaced early February, after prime minister Emil Boc resigned in the wake of social unrest due to tough austerity measures.
“From a macroeconomic point of view, we see no room for the new government to adopt populist measures without jeopardizing the precautionary agreements with the International Monetary Fund and the European Commission, and without losing the confidence of foreign investors,” the Austrian lender said in a report.
Raiffeisen estimates Romanian economic growth will slow down to 0.5% in 2012, from 2.5% a year earlier, affected by a mild recession in the eurozone and a weak farming output.
“Economic growth this year might outpace our current expectations, provided that external markets would continue to perform better that expected in the coming period,” the report noted.
The low inflation rate coupled with a decrease in risk aversion on the external markets could prompt the central bank to further ease its monetary policy rates. The Austrian lender estimates the central bank will cut its key interest rate by 0.5 basis points to 5% during the next two meetings.
“Market players seem to share the same view (an easing of the monetary policy in the coming period) as interbank interest rates and yields for RON government securities sped up their decline in the last weeks,” Raiffeisen said.