Romania, the only East European country to see its economy contract in 2010

The Gvt. currently expects GDP to shrink by 1.9% in 2010, Finance Minister Sebastian Vlădescu stated at the end of last week. Hungary, Baltic countries, Poland, the Czech Republic, Slovakia and Bulgaria have exited or haven't even been in recession. Romania is hence going to register the worst economic performance in CEE this year, though the country's highest ranking officials during 2009 repeatedly said we would exit recession in 2010. Thus, the three most important figures of the Romanian state, president Traian Băsescu, premier Emil Boc and NBR governor Mugur Isărescu during the entire 2009 said the economy would revert to growth in the second half of 2010. Moreover, NBR officials until mid-2009 insisted there would be no economic downturn in 2009, either. Economic growth prognoses have rapidly deteriorated since early 2010, putting the construction of the budget around a GDP increase of above 1%, determinedly agreed on both by the NBR and the IMF, under the sign of a doubt. Analysts now expect the economy to decline by 2.5-3%, whereas two quarters ago most of them forecast a slight recovery after last year's recession. The official estimates on the trend of the economy in 2010 and 2011 will be made public this week at the end of the IMF visit. Premier Emil Boc also admitted yesterday the economy would contract by a higher percentage than the anticipated level on the VAT hike and floods. Most projections point to an increase by as much as 2% of the Romanian economy in 2011, but ING analysts expect recession to continue next year, when GDP may fall by 2.2%.