The budgetary deficit-deepening trend is a reason for concern,and Romania needs tough measures to avert a "debt spiral", statethe analysts of Britain's Barclays group.
Whereas the deficit may halt at 7.5% in GDP against the 7.3%target this year, analysts consider cutting the deficit at 5.9% in2010 is unachievable.
"The fiscal problem is difficult as recent deteriorations arestructural and cyclical. Trends will not reverse automatically oncethe country exits recession, they will require unpopular politicalmeasures. These should be related to pension reform, addressinglosses state-owned companies are coping with and raising the maintaxes," states Daniel Hewitt, senior economist for emergingeconomies of Europe, the Middle East and Asia with BarclaysCapital.
Austria's Erste Bank also considers the state will not be ableto reach the budgetary deficit target for 2010, agreed with the IMFat 5.9%, with the imbalance to hit 6.5%-7% in GDP.
On the other hand, Barclays considers the state will not haveany problem in financing its 4bn-euro deficit in November andDecember domestically, after foreign banks have recommitted tomaintain their exposures to Romania and the RON will not come underpressure, either.
The British analysts point out that the foreign deficit,Romania's main problem in the past years, has adjusted, so that theRON, close to all-time lows, would have room to advance. At thesame time, the NBR may resume the monetary policy relaxation cycleonce political turmoil subsides, with RON interests likely to godown to 6% next year, from 8% at present.
Barclays Capital analysts consider Romania will see its economydecline by 6.5% this year, a quite upbeat estimate compared withlocal analysts' projections. For 2010, they project 2% economicgrowth mainly due to the basic effect. Less optimistic, Erste Bankanalysts believe Romania will register 0.2% GDP growth.
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
