NBR doubts Government's economic recovery forecasts

The National Banks doubts the economic growth forecasts of the government and even its capacity to rectify the budget deficit, as stated by Lucian Croitoru, advisor to the NBR Governor on monetary policy issues. This is a first for the NBR.
Economic growth might be even “more negative” than the current projection, which already indicates a 1.9% contraction, said Croitoru yesterday during a seminar on the adoption of the euro organised by the NBR. He says the Gross Domestic Product will not be much higher in 2011, either.
Lucian Croitoru believes that adjusting the budget deficit will be very hard to do, because one of the important levers to achieve it was precisely the economic growth, which would have translated into a larger taxation base for the state and subsequently into higher revenues.
“We have to converge towards a budget deficit of 3% (of GDP in 2012 i.e.) and 4.4% in 2011 from 6.8% this year. I believe both targets are extremely difficult to reach. Deficit reduction is based on the GDP growth, which I don’t think will occur. Even in 2010, the growth of the economy might be more negative than they’re estimating now,” said Croitoru, adding that the 2011 GDP would not be much different than this year’s in real terms.
Therefore last year’s scenario when economic performance forecasts were repeatedly revised downwards is repeating.