5.5% economic growth in 2006

Floods will affect economic growth this year, and consumption will continue to trigger an increase in foreign deficits, reads a study conducted by UniCredit Group. During the last three months, analysts of the UniCredit bank have altered their calculations, forecasting that Romania”s economic growth for 2006 will not be as high as originally thought. UniCredit is predicting that the figure is more likely to be 5.5%, rather than the 5.8% published in February, according to a bulletin published on Monday. This correction in the UniCredit forecast was made because of the floods witnessed in the first part of the year, reads the report. The official growth target for 2006 currently stands at 6%, but official sources declared recently that this figure could be even revised upwards in the forthcoming period. Investments (gross formation of fixed capital) and consumption will be the forces driving this year”s economic growth, while net export (the difference between exports and imports) will pull down the increase in the GDP, results of the UniCredit study say. In the past, economic growth forecasts by UniCredit experts have been at least one percentage point lower than those of the Romanian officials. ZF