Direct Iraq-related costs: $4m/month

The Romanian economy could be hit by the global slowdown and by the increased investor reluctance in the event of a war against Iraq, as well by the soaring oil prices, impacting on the trend of the Gross Domestic Product, the inflationary rate and the balance of payments, said Edward Parker, Fitch Ratings analyst for Romania. “Romania’s decision to back the US position against Iraq was the choice to make in line with the NATO accession strategy. The $4m/month estimate of the direct costs triggered by Romania’s participation is relatively low, even if maintained for a year, as it accounts for only 0.1% of GDP. The impact on the Romanian economy is going to be much bigger, though,” Parker specified. The Fitch Ratings official, on the other hand, explained that Romania’s macroeconomic development had been solid lately. “Romania’s growth rate last year was among the highest in the entire Europe, inflation went down and so did the current account deficit, while the foreign currency reserves increased,” he added. ZF