Romania's GDP could double in 2013 against 2007 on healthy economic growth, prognosis shows

Romania's Forecast Commission (CNP) estimated nominal values of the gross domestic product (GDP) to double by 2013 against last year and maintained economic growth projections for the following six years, the spring preliminary report reads.

CNP indicated a 475 billion lei GDP (133.8 billion Euros at a 3.55 lei/euro exchange rate) in 2008 while the fall report estimated 442.8 billion lei and the short-term prognosis published at the beginning of March said 470 billion lei.

Romania saw a 6 percent economic growth in real terms last year. GDP stood at 404.7 billion lei, almost 24 billion Euros more due to the strengthening of the Leu.

However, the national currency has started to decrease since the beginning of the year and the weakening of the Leu increased the cost of services priced in Euros, including rents and phone bills.

For the next six years CNP follows the economic growth estimates (6.5 percent this year, 6.1 percent in 2009, 5.8 percent in 2010 and 2011 and 5.7 percent for 2012 and 2013).

On the other hand, GDP estimates are better-than-expected compared to November 2007. For the next year, CNP revised GDP projections from 493.8 to 546.8 billion lei. Therefore, GDP could reach 841 billion lei by 2013.

Constructions will remain the fastest growing industry over the next six years, outpacing services. Constructions are poised to hike 22 percent this year and temper during the following years.

The most pessimistic prognosis was cast over industry which could temper its growth to 5.2 percent this year from 5.4 percent last year. Industry too will maintain a rather constant pace over the next years (5 percent in 2009, 5.1 percent in 2010 and 2011 and 5.2 percent in 2012 and 2013).

Agriculture, which slumped 15.3 percent last year, should see hikes over the next years. This year agriculture could grow 4 percent. The pace could temper gradually afterwards reaching 2.2 percent in 2013.

CNP foresees the advance of services over the 2008 – 2013 periods. Services could grow 5.6 percent this year and reach 6.3 percent in 2013.