Moody's Says Romania's GDP May Shrink 0.3% in 2009 - Media

“The liquidity crisis and the economic slowdown in the euro zone will weigh significantly on the Romanian economy,” The Money Channel quoted Moody’s senior analyst Kenneth Orchard as saying. “Current account deficit will deepen significantly, while imports will fall sharply.”

Worsening conditions on global markets will lead to a fall in domestic demand in Romania and may force the country’s government to tighten fiscal policy, he added.

Romania's government, which faces parliamentary elections at the end of this week, projected an economic growth of 6.0% in the budget draft for next year.

For this year, Romania's National Prognoses Commission, the government's team of economic advisers, set its projection for economic growth at 9.1% in real terms. The European Commission has forecast a real 8.5% growth in Romania's 2008 GDP.

On October 30, Moody's said Romania's A1 foreign currency ceiling and Baa3 government bond ratings, with a stable outlook, are based on medium economic strength combined with medium institutional strength. Rating agencies Standard & Poor's and Fitch have recently downgraded Romania's credit rating due to risks to its economy in the context of the global crisis.

($= 0.794 euro)