“Third-quarter Gross Domestic Product was -7.1% year-on-year, versus our previous forecasts of -9.2%. Seasonally adjusted quarterly data scaled back to -0.7% versus -1.1% in second quarter. Q3 numbers suggest the Romanian economy is moving in the right direction and that we could even see a positive economic growth as soon as in fourth quarter. Today, we are even more convinced that third quarter will mark the worst point of recession”, ING said.

ING analysts added that third-quarter GDP data confirm that full-year economic contraction is very likely to stand within 6.5%-7% range, versus ING’s estimates of 7.5%.

“Until then, the level of confidence in our forecasts regarding a positive economic growth in 2010 has risen. However, we want to stress the fact that the Romanian economy will remain vulnerable to economic risks in the second half of next year”, ING stressed.

The risks outlined by ING refer largely to political factors, measures that need to be put in place to bridge the budget gap, and “NBR’s preference to control exchange rates, which subsequently puts interbank rates and household and business loans under pressure”.

ING pointed out that the recovery of the Romanian economy cannot rely solely on external factors, even if for the time being, boosting external demand could resuscitate industry and exports, given that next year, net exports will have a lower contribution as imports are very likely to pick up.

Unemployment rates to hit 8% in 2009 and 10% in 2010

In October this year, jobless rate jumped to 7.1% from 6.9% in September, below ING’s projections, which suggest that “unemployment rate should undergo a limited growth until the end of the year and 2010”. Unemployment rates will increase once the state begins to cut jobs. In ING’s view, unemployment rate will climb to 8%, below 8.4% previously forecasted