Analysts with Erste Group forecast 1.1 percent GDP growth in Romania in 2013. However, something of a trough is predicted in the first quarter of the year. In the CEE markets and stocks report, published today (January 7 ), two important points are given, which according to Erste Group will drive markets in Central and Eastern Europe (CEE) this year. First, “economic weakness and even recession are increasingly tangible,” which the Erste Group report deems more likely in the first quarter of 2013. The eurozone crisis is given as another important factor, but Erste Group's analysts believe that it will not escalate greatly.

Based on these assumptions, Erste Group predicts that CEE equity markets will start slowly in January 2013 before gaining momentum later in the quarter. A strong fourth quarter in the regional equity markets is also given as an extra reason for the slow start to this year. “We are actually pleased that Romania did so well, while our main reservation has been liquidity,” said Head of CEE Equity Research at Erste Group Henning Esskuchen.

Erste Group's 1.1 percent growth prediction for 2013 in Romania remains unchanged from the end of November 2012, when 0 percent growth for 2012 was forecast. A the time, Erste Group also predicted 2.3 percent GDP growth in 2014 and 2.9 percent in 2015. The November report envisaged average unemployment rate staying at 7.4 percent for the next few years, before dropping slightly to 7.3 and 7.2 percent in 2014 and 2015. The exchange rate average for 2012 was predicted at 4.45RON/EUR, while from 2013 to 2015 average rates of around 4.50RON/EUR were forecast. Erste expected a bigger fall against the US dollar, from a 3.48RON/USD rate this year to average rates of around 3.75RON/USD in 2013 – 2015.

Austrian Erste Group owns Romania's Banca Comerciala Romana (BCR), the largest local lender by assets. Erste Group was founded in 1819 as the first Austrian savings bank. The group employs more than 50,000 people and has 17 million clients across the region. Erste Group operates over 3,000 branches in eight countries – Austria, Romania, Hungary, the Czech Republic, Slovakia, Croatia, Serbia and the Ukraine.

Liam Lever, liam@romania-insider.com