Romania's economy will contract by 2-4% this year and the budgetary deficit could register 5% of GDP, Moody's analyst Kenneth Orchard estimates, quoted by the Romanian news agency NewsIn. He underlined that if this will happen, even a 1% decrease of the budgetary deficit will be tough.
The rating agency estimated as early as last year an economic decrease but the current estimates reveal a 2-4% decrease in 2009. In what concerns the budgetary deficit, Moody's estimated that it will reach 5% this year for a budgetary spending of 38.6% of GDP with revenues representing 33.5% of GDP.
Considering Romania's economic environment, the government will have a hard time reducing the budgetary deficit even by 1%, Moody's economist said.