EIU sees economic slowdown

Romanian economic growth will slow down next year, when the Gross Domestic Product will climb a mere 3.5%, but it will go up to 4.2% in 2003, according to analysts of the Economist Intelligence Unit (EIU), a division of The Economist Group.

The Romanian economy will conclude the year 2001 with a growth pace of 4.5%, analysts say, although they estimated the growth level at 4% this summer, below the official target of 4.5-5%.

“I believe they use a geometric model that works only in a very static economy, with no rapid structural changes such as the ones occurring in Romania,” says Development and Prognosis minister Leonard Cazan.

The growth levels forecast by EIU for next year are lower than the targets set by the Government and the International Monetary Fund, namely 5% in 2002 and 5.2% in 2003. According to Romanian authorities, the growth pace for the first half of 2001 stood at 4.9%.

The Romanian GDP is estimated at 1,108,236 billion ROL for this year, 1,430,626 billion ROL in 2002 and 1,756,641 billion ROL in 2003. GDP per capita is expected to reach 1,700 dollars this year, 1,890 dollars in 2002 and 2,110 dollars in 2002.

EIU expects Gross Domestic Product calculated based on the purchase power parity to stand at 4,732 dollars in 2001, 4,949 dollars in 2002 and 5,253 dollars in 2003.

The consolidated budget deficit is estimated at 3.6% of GDP this year and 3.3% next year, while the Government targets stand at 3.5% and 3%, respectively.

EIU forecasts take into account the world economic slowdown, aggravated by the terror attacks against the United States, and the fiscal policy to be promoted by the Executive next year, aiming at cutting the budget deficit and economic arrears and at preventing unsustainable economic growth.