The economic growth of Romania will be of 5.2% in 2006 and will improve to 5.6% next year, according to the latest half-year report of the International Monetary Fund. The report produces inflation and current account deficit forecasts according to data Romanian institutions have submitted so far.
The IMF prediction of a 5.2% GDP growth in 2006 stands below the Romanian target of 6%. And the Fund believes the average inflation will be of 7.9% in 2006 and 4.8% in 2007, while the Romanian commission of economic prognosis bets on an average inflation of 7.2% this year. The inflation target of the National Bank – BNR is even more ambitious, at 6%.
The same IMF predictions say the current account deficit will reach 8.3% of the GDP this year and lower to 8.1% in 2007, while the Romanian commission of prognosis puts it at 8.5% of the GDP.
IMF experts analyzing Romania and Bulgaria jointly say that in both countries domestic demand has exceeded expectations following the accelerated boost of credits, salaries and lower taxation, accompanied with a bigger volume of investments. "That is why inflationary pressures intensified in Romania, despite the improvement of the Romanian currency, the leu", the report says.
The Fund warns that the foreign deficits of Romania and Bulgaria remain a serious source of vulnerability that needs a lower advance of credits, especially on the consumer market.