Most of Romania's economic growth over the past few years is in fact making up for all the losses in the difficult years at the end of the last decade, instead of a real progress, the European Bank for Reconstruction and Development (EBRD) chief economist Willem Buiter feels. "The real growth is only just beginning and it needs an improvement in productivity and more investments," Buiter says. GDP fell 6.1% in 1997, 5.4% in 1998 and 3.2% in 1999. The last two years registered 1.8% and 5.3% economic growth, while the authorities expect this year's GDP growth to reach 4.5% -5%. The EBRD forecast shows 2002's GDP to grow by only 3.5%, although the nine-month GDP was 4.5% higher than in the year-ago period. Foreign direct investment in Romania in 2002 is estimated by the EBRD at $1.2bn, with the 1989-2001 volume amounting to $7.9bn. Buiter says the foreign investment volume could be twice higher should Romania firmly commit to reforms. "Romania could attract twice higher foreign investments if reforms were credible and the country were ready to join the EU in 2007. This is only four years away and although real progress has been made, there are still a lot of things to be done," Buiter added. ZF
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