Fitch: Romanian economy to contract 1% this year

After having suffered a 7% economic contraction last year, Romania’s GDP growth is expected to remain in the negative territory this year and drop 1%, according to Fitch Ratings estimates.
Fitch ratings anticipates a 1% economic contraction this year, which means Romania will be stuck in its worst recession in 2010 too.

Richard Hunter, managing director EMEA & Asia Pacific Fitch Ratings predicted a 1% economic contraction this year, but said it wasn’t necessary a revision of the country’s rating outlook.

In February, Fitch has revised Romania’s outlook to stable from negative and affirmed the country’s long-term foreign and local currency Issuer Default Ratings at 'BB+' and 'BBB-' respectively, citing better market conditions.

“For the time being, there is no strong reason to change Romania’s outlook from stable, but it isn’t impossible either”, said Richard Hunter.

Fitch said in February Romania has to continue fiscal consolidation in order to support the external adjustment of the economy and to temper down the growth rate of public debt. Fitch said Romania’s public debt will reach 33% of GDP by the end of 2010, compared to 21.8% at the end of 2009.

Romania’s public debt reached 30.6% of GDP at the end of first quarter, according to data from the Ministry of Finance.

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