Standard & Poor's: Romania's economy will drop by over 6% this year

Vineri, 17 iulie 2009, 17:25 English | Business

Romania's economy will drop by more than 6% this year, Standard&Poor's analyst Marko Mrsnik declared ,quoted by Romanian news agency NewsIn. Mrsnik underlined that Romanian authorities need to consolidate the state's budget and the fiscal policy to stabilize ratings.

The analyst explained that by the second quarter the agency will revise forecasts for Romania's falling GDP. Investments dropped significantly and so did consumption. The latest evolutions were influenced by the restrictive credit policy. He declared that Romania's economy might drop by 6%.

Mrsnik declared that Romania will not be able to maintain its budgetary deficit and will reach 6.2% of GDP, irrespective of the IMF and EC restriction to 4.5%. The trend is caused, he said, by the decrease of revenues.

He warned that the government could rely excessively on financing from local banks which are owned by foreign ones. However, Mrsnik added that banks might change their strategy and fear risks.