Romanian economy will contract by 7.5% in 2009 and by 2% in 2010, according to Bank of America Securities-Merrill Lynch analysts, quoted by NewsIn. In the previous report, the bank's analysts estimated a 6.4% economic contraction in 2009 and 2.5% in 2010.
Romania's GDP dropped 6.2% in the first 2009 quarter against the same period in 2008. Public Finance minister Gheorghe Pogea said that the economic contraction in Romanian economy for the second quarter was superior to the first, going over 8%.
The IMF adjusted the forecast for Romania's economic downturn for this year to 8-8.5%, from their former 4.1% prognosis.
The investment bank's analysts consider that Romania's National Bank (BNR) will reduce the interest rate for monetary policy to 7.5% in the course of the current year, as opposed to 8%, their former prediction. They expect it to drop further, recording 5.5% in 2010.
BNR's administration council decided on August 4 to reduce the key annual interest rate from 9% to 8.5%, according to estimates, but surprised the market by lowering the level for the minimum compulsory foreign currency passives to 30%, which will make new liquidity available for banks.