The European Bank for Reconstruction and Development (EBRD) has revised down its estimate for GDP growth in Romania. The new forecast is for 0.8 percent real GDP growth in 2012, down 0.4 percent from the 1.2 percent figure the EBRD predicted in May.

The EBRD cites the now familiar reasons: weakening exports to the eurozone and deleveraging of subsidiaries – essentially funding for Romania's largely foreign owned banking sector drying up. According to the EBRD regional report, seasonally adjusted output was down in Q1 2012 on the previous quarter by 0.1 percent.

There is also a warning that the current political crisis could have an impact on short term growth. On the up side, the EBRD considers support for Romania from the International Monetary Fund and other international financial institutions as important mitigating factors in the country's overall economic health.

Liam Lever, liam@romania-insider.com

(photo source: EBRD)