Economist Intelligence Unit: Romania is one of most vulnerable countries in the region to financial troubles abroad

Marţi, 18 martie 2008, 14:44 English | Business

Romania is one of the most vulnerable countries in the region when it comes to international financial troubles considering its high current account deficit, fueled by economic growth and domestic consumption, according to a report by the Economist Intelligence Unit, quoted by Romanian news agency Mediafax. The EIU economists warn that the current account deficit was dealt with mostly by foreign direct investments, but these incomes will slow down as the privatization process in the country comes to an end.

Central and Eastern Europe has benefited from a still strong growth in the euro zone, despite that in the case of certain states such as Romania and Bulgaria the demand for foreign funding is still high, meaning that these countries are vulnerable to a change of investors feelings, the report says.

The risks related to the high level of the current account deficit in Romania, which reached 14.2% of the GDP last year, and its financial coverage have been underlined by several national and international economists. Forecasts for this year say the 15% threshold may be exceeded.