Romania's economic growth prediction slides for 2012 and 2013

Romania's Prognosis Commission expects the country to post an economic growth of only 0.7 percent this year, down from 1.7 percent as estimated earlier in May. For 2013, the economic increase forecast went down from the previous estimation of 3.1 percent to 2 percent. Earlier in September however, the Prognosis Commission sent the Government an estimation of 1.2 percent growth, for the latest IMF deal revision. The country's Gross Domestic Product (GDP) went up by only 0.2 percent in the first nine months of this year, compared to the same period of 2011, and in the third quarter it even went down by 0.6 percent. The 2013 prognosis follows a similar path. Other institutions had a different approach and estimated a lower economic growth for Romania: Trade risk assessment company Coface recently gave one of the most pessimistic forecasts so far, of 0.5 percent growth for this year. The European Commission was a bit more optimistic: 0.8 percent growth prediction, while the IMF gave a 0.9 percent figure. Romania's economy was up 2.5 percent in 2011, much helped by the good crops, which were however an exception, and did not reflect the country's real potential, president Traian Basescu recently said. Meanwhile, the country's budget deficit after ten months stayed close to 1.2 percent of the GDP, similarly to the end of September, but lower than after the first ten months of 2011. Romania pledged to keep the budget deficit under 2.2 percent this year, in its agreement with the International Monetary Fund. In 2011, the country';s budget deficit was of 4.3 percent. According to forecasts, next year it should stay at 1.7 percent of the GDP. editor@romania-insider.com