The European Bank for Reconstruction and Development (EBRD) has slightly improved the economic growth forecast for Romania, at 1.9 percent from 1.8 percent in May, but warned that new austerity measures undertaken by the Government in agreement with the IMF will affect preventive recovery in domestic demand.

In EU members Bulgaria and Romania, economic prospects are improving but at a modest pace. In Romania, a recovery finally appears to be underway after two years of negative growth and the economy is expected to return to modest positive growth rates this year. Exports are growing strongly, industrial production was up more than 7 percent in May 2011, and even the construction sector is starting to turn around, according to EBRD.

For the South-East European region, including Romania, the bank's forecast went slightly up for this year, from 2.2 percent to 2.3 percent economic growth, but operated a reduction of 0.1 percentage points for next year, from 3.7 percent to 3.6 percent.

The International Monetary Fund (IMF) and the European Commission estimate a 1.5 percent growth this year in Romania.

Read the full EBRD publication here (PDF version).

Irina Popescu, irina.popescu@romania-insider.com

(photo source: Sxc.hu)