Pogea sees a 7.1% contraction of Romanian economy

Minister of Finance, Gheorghe Pogea said Romanian economy could contract this year by as much as 6.5-7.1%, above the level assumed by the government at its budget revision, of 4%.
“For the moment, there are no data available on economic contraction in first half. The economic growth will surely be in the negative territory. At year-end, the drop could be in the range of 6.5-7.1%”, said Pogea.

The prediction made by the minister of finance is the most pessimistic estimation ever made public by a member of the government.

Earlier, president Traian Basescu said at Prague that the economic growth would not turn positive in the second quarter, but expressed his hope that the economic performance would improve in the third quarter.

At the time Romania signed the financing agreement with IMF, the government took over the fund’s macroeconomic projections, which set the country’s GDP contraction at 4% in 2009.

The 6.2% YoY economic slowdown in first quarter topped market and IMF’s expectations. Subsequently, the International Monetary Fund said the institution was very likely to revise its current projections.

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