2012-10-13 05:45:53 - New Country Reports research report from Business Monitor International is now available from Fast Market Research
Core Views Romania's return to growth since 2011 has so far been driven primarily by export demand. As the eurozone sovereign debt crisis weighs heavily on this previous growth driver, we expect domestic economic activity to cool despite looser fiscal policy following two years of severe IMF-led fiscal austerity. We forecast 2012 headline growth of 1.0%, compared with 2.5% growth in 2011. We forecast Romania's current account deficit to widen to 4.7% of GDP in 2012, from an estimated 4.2% in 2011, as external demand for the country's exports cools. That said, we expect continued improvement in investor confidence, and our previous expectation that Romania's narrowing financial and capital account surplus would be unable to finance a widening current account
deficit in 2012 no longer holds. Major Forecast Changes We have revised down our forecasts for Romanian real GDP growth in 2012 and 2013, to 1.0% and 2.1% respectively, from previous forecasts of 2.5% and 2.9%. Our significantly weaker outlook for the global economy, combined with the country's high exposure to peripheral eurozone banks, is set to drag headline growth lower. We have modestly revised our forecast for Romania's 2012 budget deficit to 3.2% of GDP, from 3.0% previously. Weaker economic growth and a renewed bout of investor risk aversion that will delay the IMF-led privatisation agenda will weigh on government revenue. However, cross-party commitment to the country's IMF Stand-By Arrangement, and future spending restraints, mean we expect the budget deficit to remain within the EU-defined 3.0% of GDP limit from 2013 onwards. We have revised our average 2012 and 2013 leu exchange rate forecasts to RON4.4200/EUR and RON4.4500/EUR respectively, from RON4.3900/EUR and RON4.4000/EUR previously. Although our fundamental view for the unit to remain relatively stable in the medium term remains unchanged, the leu's recent weakness indicates that the currency is set to trade within a higher range than we previously expected. Key Risks To Outlook Downside Risk To Growth Forecast: The eurozone sovereign debt crisis presents a substantial risk to global and thereby Romanian economic growth. Although our core scenario is for policymakers to reluctantly take the action necessary to contain the crisis, there is still a risk of a disorderly outcome, potentially catalysing a renewed global downturn. Romania would be extremely vulnerable under such a scenario.
Full Report Details at
- www.fastmr.com/prod/479341_romania_business_forecast_report_q4_2 ..
About Business Monitor International
Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010
About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
For more information about these or related research reports, please visit our website at www.fastmr.com
or call us at 1.800.844.8156.