Isarescu: unemployment rate will rise in 2009

Frictional unemployment will take a steep uptrend in 2009, and the labor market in Romania will have to be more flexible, said Mugur Isarescu, governor of National Bank of Romania (BNR).

“We have to streamline the labor legislation and to know that any economy with a rigid labor market will loose. The solution to unemployment consists in a streamline of the market”, said Isarescu.

He added that, if a part of Romanians who are working abroad will comeback in the country, it should be no reason to fear, but Romania will have to exclusively focus on re-training workforce in infrastructure and agriculture.

“We will have to focus on infrastructure and agriculture. For next year, we will have to concentrate our efforts towards work, productivity, saving and investments where is needed”, Isarescu added, NewsIn informs.

Moreover, BNR governor said he does not anticipate the best outcome in terms of inflation in 2009 as in other macroeconomic indices, saying a deepening inflation, combined with a stimulated demand, will increase the current account deficit.

“I am not suggesting a general stimulation of demand, given the fact that the effects of salary growth will take shape in 2009 and 2010, and that we already have a surplus in demand,” said Isarescu.

Governor of National Bank of Romania also emphasized the importance of the high level required reserve ratios, in the context of current account deficit adjustment.

Isarescu: Economic growth, between 3% and 6% in 2009

Romania will register an economic growth between 3% and 6% in 2009, according to “how wise will the political proficiency and how fair will be the diagnosis”, said Isarescu, referring to the aftermath of the global economic crisis in Romania.

“It is a personal point of view which I haven’t yet made public before the Board, that the economic activity will be loosened and the economic growth will probably be between 3% and 6%, pending on how wise will be the political proficiency and how air will be the diagnosis”, Isarescu stated.

Translated by Camelia Oancea

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