Economy drop not huge, but neighbouring countries already on the rebound

The recession persisted in Romania in the first quarter, so that the Gross Domestic Product fell by 2.6% compared with the same time of last year, which is less than the analysts’ 3.4% forecast; however, other economies in the region are already on the rebound.
The Czech Republic’s economy, for instance, progressed by 1.2% compared with the first three months of 2009, while Hungary’s GDP growth stood at 0.1%. Compared with the last quarter of 2009, the Romanian economy went down by 0.3%, which is the best quarter-on-quarter performance in the last eighteen months, the preliminary data published by the National Statistics Institute (INS) reveal.
This implicitly confirms IMF’s recent fears about a decline in budget revenues, and the entire budget will now have to be adjusted to the forecasts.
“Low domestic demand and a harsh winter led to these negative results. On the other hand, high foreign demand from the euro zone has driven the industry performance and reduced the extent of the economic decline,” explains Eugen Sinca, an analyst with BCR’s research department.
As a result, BCR has revised its 2010 growth forecast downwards, from 1.9% to 0.2%.