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Friday, July 5, 2013 Austrian banking group Erste estimates indicate that agriculture could occupy the position of locomotive in 2013 for Romania’s economy. In case of a good harvest, experts estimate that Romania will register a higher advance from the initial forecast, Erste counting this year on an economic growth of 2.2 percent. The analysis shows that the estimate for Romania this year is 1.8 percent, but with a potential of speeding up to 2.2 percent, ‘in case of a good agricultural harvest, which seems likely, according to the director of capital markets research for CEE of Erste Group, Henning Esskuchen. The following year, the Romanian economy could grow by 2.3 percent. The international financial institutions, the European Commission, the IMF, and the Government have economic growth expectations for this year slightly more pessimistic than Erste forecast. The European Commission anticipates that Romania’s economy will grow by 1.6 percent this year, in line with IMF and Government estimates, and by 2.2 percent next year. IMF forecasts a growth of 2 percent for 2014. The World Bank expects an economic advance of 1.7 percent this year and 2.2 percent next year, while the European Bank for Reconstruction and Development is the most pessimistic, considering an advance of GDP of 1.4 percent this year and 2.2 percent next year. Romania has successfully completed two successive stand-by agreements with the IMF and the European Commission, conditional on austerity measures and reforms. The austerity measures have included layoffs and a 25 percent reduction in public sector wages, as well as a VAT increase. Public employees wages were subsequently recovered in two stages. The European Commissiona ceased in June the excessive deficit procedure for Romania, Hungary and other three countries, after assessing that the governments have lowered the budget deficit below the limit of 3 percent, and the Commission appreciated a downward trend in the coming years. Continue reading →