Inflation could go down to 25% in 2001

Romania will register this year inflation standing at 35-36 percent, which next year might drop to 25 percent, considers Ceyla Pazarbasioglu, a chief economist for Central and Eastern Europe and Central Asia with ABN Amro.

According to a report the bank made public this spring, estimates pointed to economic growth of 0.5 percent in 2000, and Ceyla Pazarbasioglu considers that next year the economy might register growth of 2 percent, on the basis of increased consumption.

ABN Amro economist thinks that the Romanian Government’s having overshot the initially settled inflation target will not necessarily constitute a problem in relationships with the International Monetary Fund.

In fact, Pazarbasioglu explains, the Government did not have any explicit programme aimed at reaching a certain inflation target, but announced an objective that was meant to help it keep budgetary deficit under control.

She thinks that the Government should focus on creating a clear and simple legislative framework for business, on reducing bureaucracy, restructuring the public sector and consolidating the banking sector, which would be more important than settling certain targets for various indicators.

“Romania has done what it should have done back in 1999,” commented Ceyla Pazarbasioglu, referring to the fact that the Government paid off foreign debt instead of restructuring it, as the International Monetary Fund had requested.