Croitoru, NBR: Worst point of recession to be reached in third quarter

Gross Domestic Product could be significantly lower in second and third quarter of the year, although the predictions don’t include a double-digit decline, and in July-August, Romania’s economy could mark the worst point of recession, said Lucian Croitoriu advisor to the governor of National Bank of Romania.

“The current account deficit may be 7% of GDP and even though it seems incredible, we could steer the deficit to values below this threshold. If it narrowed to 12.3% in 2008, it is still room for further decrease”, said Croitoru.

Romania’s budget plan is reliable and functional and together with the rescue plan it would bring current account gap to 13% by 2013, Mugur Isarescu’s advisor continued.

Inflation rates will go back in the central bank’s target range, of +/-3.5%. “In 2010 inflation rates could even go below NBR band, which could be a problem as well,” Croitoru stressed.

For the time being, the nation’s average saving rate is around 17% of GDP, but in a sound economy, the measure should be in the range of 24%.

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