The economic projects that will be presented on Monday in the Parliament are excerpts from the Spring Economic Forecasts of the National Prognosis Commission and establish the fiscal-budget framework for 2011-2012 based on the commitments assumed in the Fiscal Responsibility Law, as part of the IMF conditions under the loan deal.

In last year fall, CNP had predicted a 1-2% economic growth in 2010.

As for the fiscal framework for the 2011-2012 period, the Government has committed to narrow the general budget deficit from 7.4% of GDP to 6.8% in 2010, to 4.4% in 2011, 3.0% in 2012 and 2.5% in 2013.

Also, public sector wages in the general budget expressed in percents in GDP are estimated at 7.3% in 2011 and 7.1% in 2012.

Recently, the Minister of Public Finances, Sebastian Vladescu issued a disappointing economic forecast for the remainder of the year, dampening hopes of a return of the GDP in the positive territory, and warned that “within three, six months or even a year, it could get worse”.

Revised outlook

  • Raiffeisen has revised its 2010 economic growth outlook on Romania downwards, from 1% to flat, on negative impact of the austerity plan put in place by the Government. However, a negative economic growth is not ruled out. For 2011, Raiffeisen estimates an economic growth of 3.5%.
  • EBRD said Romania will record a near-zero economic growth this year, but predicts 3% advance in 2011.
  • The International Monetary Fund has also revised its growth outlook on Romania downwards, from 1.3% to 0% or even below 0, but the economy should turn positive for the remainder of the year.