The economy will see moderate growth this year, no more than1.5%, driven by industry and exports and will only reach its peakgrowth potential, 5 or 6% as late as 2012, according to MihaiTanasescu, Romania's representative to the International MonetaryFund.
"I am optimistic, but how we'll recover what we lost over thepast year and how fast we'll manage to achieve the 5 or 6% growtheconomic growth potential that Romania has is up to us," Tanasescutold an economic seminar. He believes Romania needs a new economicgrowth model and can no longer rely on foreign debt to avoidreverting to the same problems that caused the recession in thefirst place.
Radu Craciun, chief investment officer of Eureko Pensii, alsosees the need for a radical change of how the Romanian economy hasbeen managed, considering the time of cheap money from abroad isgone. "Romania's performance is pitiful because it failed to takeadvantage of the European Union funds and with money no longer thatcheap this is a crime," he says.
The analysts attending the seminar organised by Finmediaunanimously agreed that the economy would slightly rebound thisyear with industry as its main growth driver.
"We will see a slight economic growth, which will come fromindustry, whose performance was one of the best in the EuropeanUnion. November figures show the industrial output is only 2% lowerthan the pre-crisis level," says Ionut Dumitru, Raiffeisen's chiefeconomist.
Florin Pogonaru, chairman of the Business People Association ofRomania (AOAR) says the industry is indeed beginning to rebound,which will fuel export growth since there is not enough domesticdemand.
"2010 is a year that starts badly and ends well. We will seesome dramatic changes of the landscape around us because the eurozone needs to be rebuilt institution-wise," Pogonaru believes.
Economists say that a potential acceleration of the economicgrowth over the coming years will be up to the continuation of thereforms agreed upon with the IMF, to the modification of the fiscalpolicy and to regaining the trust of foreign investors.
"We need a selective policy to help the economy and make thebusiness environment predictable, so as to allow it to develop inthe long run. The social welfare system will be redesigned inRomania soon and expenses will be have to be directed to theinvestment sector," Tanasescu said.
Aurelian Dochia, chief executive of Concept Business Consult,says the economy will be driven by foreign investment. "Foreigninvestment will continue to drive the economy because the pressureon Western companies to relocate is still high. We are wellpositioned in this regard," Dochia stated.
Romania could also benefit from its position as a country on theborder of the EU, considering Western firms will try to conquer theEastern European market in the years to come. "Romania remainsattractive. The next bridgehead of eastward expansion of theEuropean market will be built here," says Florian Libocor, BRD'schief economist.
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