Government maintains economic growth forecasts

The 5.2% economic growth forecast for this year maintains and stands all the chances of being exceeded, Development and Prognosis minister Leonard Cazan yesterday said. He says the pessimism based on the January and February economic results was not confirmed.
“We will see economy taking off in full gear in April, but we’d better remain cautious,” Finance Minister Mihai Tanasescu in his turn said.
The Development and Prognosis Ministry estimates to see industrial output up 6.1% this year, while the constructions sector is expected to progress by 7.7%. Growth is also expected from agriculture (7%), services (3.8%), end consumption (3.9%) and gross fixed capital formation (9%).
As far as the inflation is concerned, the Development minister says it should reach 1.1%-1.2% in April, compared with the 1.6% forecast. He explained the inflationary rate was of 1% for the first twenty days in April.
“We planned for a higher inflationary growth in the first half this year, i.e. 3.7% in the first quarter and 3.7% again for the second quarter, starting from what the increase in the minimum wage from the 1,750,000 ROL to 2,500,000 ROL meant,” Cazan said. The consumer prices rose 3.2% in Q1.
“Actually, we have attained one percentage point less than our 5.4% forecast for the first four months,” the Development minister said.
He says “we will surely see monthly inflation below 1% this summer and we have provided for possible inflationary rebound due to various causes, such as the euro increase.”
Still, the managers of the companies on the Romanian market expect to see inflation moving up following the rise in prices in the three major economic sectors: industry, constructions and retail trade throughout April – June.
According to the latest poll conducted by the National Statistics Institute (INS), this trend will show in spite of an increase in output and sales in the three sectors. The poll canvassed 2,550 managers in the processing industry, 700 managers in the constructions business and 950 managers dealing in retail trade.
The conclusions of the INS poll also show excess finished products inventories to diminish. The managers maintain their forecasts about the decrease in the number of employees, set to occur in the state-run companies and in those that employ more than 500 people. The constructions industry is the only sector expected to actually hire more people as work on various construction sites is resumed.