Romania could record a 2% economic growth in 2011 after twoyears of recession, and cut its budget deficit to 4.4% of GDP, butpolitical risks remain high, Fitch rating agency believes.
"Despite the government's success in meeting the 6.8% deficittarget for 2010, political risk remains high. Failure to implementsufficient budgetary consolidation would erode the country'screditworthiness," Douglas Renwick, director within Fitch Ratings,told ZF.
The IMF and the Romanian authorities expect a 1.5% economicgrowth for this year.
At the beginning of 2010 Fitch estimated that the economy wouldreturn to positive territory, forecasting 2% growth, but thenmodified the GDP forecast to -1%.
Fitch analysts are part of a longer list of economists whorevise their estimate on the progression of the Romanian economy asthey go. IMF forecasts for 2010 also went from a 1.3% growth (inJanuary), to a 0.5% contraction, and then to minus 1.9% at the endof the year.
Renwick did not wish to comment on whether Romania's ratingcould be upgraded or downgraded, but said the failure to cut thebudget deficit sufficiently quickly would put downward pressure onthe rating, as would a suspension of the IMF programme; this wouldhave a negative effect on confidence and the country's externalliquidity.
In February 2010 Fitch rating agency upgraded Romania's outlookfrom negative to stable.
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