The Romanian Government reduced its growth forecast for this year from 1.5 percent to 1.2 percent of GDP,according to Mediafax, quoting draft budgetary rectification documents. The Government had initially set a growth target of 1.8 -2.3 percent of GDP, before reducing it to 1.5 percent of GDP, after discussions with the International Monetary Fund (IMF).

The budget rectification for 2012 is based on the evolution of the country's economy over the first five months. The International Monetary Fund said on Wednesday that they agree with an economic growth figure above 1 percent this year, despite the weak agriculture production and the economic slowdown in the euro area.

At the end of negotiations with the IMF, Romania's Minister of Finance Florin Georgescu avoided saying whether the Government will keep the economic growth target this year of 1.5 percent of GDP.

In the first quarter, GDP decreased by 0.1 percent over the last three months of 2011, but rose by 0.3 percent compared with the same period last year.

Ioana Toader, ioana.toader@romania-insider.com