Analysts' verdict after Q1: Economy will grow by less than 1% in 2010

The IMF, rating agencies and bank analysts are all revising estimates about this year's economic growth to less than 1%, after a weak first quarter, whose figures suggest Romania is still in recession.

Romania started 2010 as optimistic as it did last year when the authorities denied having slipped into recession, but the latest figures about decline in industry, construction and trade in February upset the initial optimistic forecasts.

The most abrupt economic growth forecast revisions in 2010 come from BCR/Erste and ING, which had anticipated a 1.9% growth of the GDP until recently, only to suggest a 0.9% now, that is one percent less.

BCR analysts believe the economy went down 0.5% in the first quarter compared with the last quarter of 2009, with the decline partly offset by exports, but warn that a rebound cannot come unless domestic demand picks up.

Lucian-Liviu Albu, doctor of economics, says that the first quarter proved expectations of Romania's exit from the crisis wrong.

Most economic analysts were disappointed by the industrial output, trade and construction figures in February, which continued to go down. As a result, they believe Romania was still in recession in the first quarter, with expectations of a rebound moving to the second quarter.