Government officials think pink

The Romanian Government is optimistic about the economic growth outlook for the next four years. Whereas this year’s growth forecasts were negatively revised from 5.2% to 4.8%, which still seems unlikely to achieve, a growth rate of no less than 5.5% is expected for 2004. The estimates rely on a gross accumulation of fixed capital, which should go up to 13%, and on a 5.2% increase of industrial output.

The macroeconomic indicators used for drafting the 2004 budget also include sustained appreciation of the domestic currency, whereas the inflation rate should drop to 9%.

Romania’s Gross Domestic Product (GDP) is estimated at 1,824,000bn ROL this year and is expected to climb to 2,143,900bn ROL in 2004.

As stipulated in the EU Pre-accession Economic Programme, Romania’s GDP would continue to increase more than 5% until 2008. Industrial output is estimated to increase at most 5%, which pace would only be reached in 2006 – 2007. Moreover, agricultural output would post a downward trend, the anticipated growth pace slowing down from 4.6% in 2005 to only 3.1% in the year Romania is supposed to join the EU.

Exports are expected to continue to fuel economic growth, but the companies operating in this field will be dealing with a double profit tax starting next year, from 12.5% to 25%.

However, government estimates point to a slower growth pace for exports, from 7.6% in 2005 to 6.3% in 2007. On the other hand, imports are expected to soar, which would result in significant commercial deficits.
razvan.voican@zf.ro