Outlook - 4th Qtr 2008
Although a high degree of uncertainty and volatility persist at the global level, Romania’s economy continues to show good resilience to the crisis, supported by prospects of a good harvest which will help keep GDP above the potential level. Some cooling of the growth rate is however anticipated as from Q4 this year, mainly on the back of lower private consumption and a slowdown of construction activity.
The weaker performance of local capital markets is expected to continue at least in the short-term, together with continuously high volatility of FX markets. The risk of a moderate decline of capital inflows remains high despite the good track record in FDI, supported also by a couple of privatisation deals. Under these conditions, a well-balanced macro policy mix remains crucial to supporting a smooth reduction of current disequilibria.
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