Romania's GDP could turn negative in real terms in the third quarter of the year due to the public spending cuts and the VAT increase, writes a report issued by BCR. However, the last quarter of the year could bring an improvement, but uncertainties are still high. BCR has kept its economic prognosis to a 3 percent DGP drop for this year.

“The Government's measures were needed, even if this means the third quarter was sacrificed. We could see economic increase in the fourth quarter of 2010, after the 0.3 percent increase in the second quarter,” said Lucian Anghel, BCR chief economist.

The macroeconomical indicators are improving and Romania could go back on the up in the second half of 2011.