Erste Bank Sees Romania GDP Falling 3% In 2010

Erste Bank Group (EBS.RO) estimates Romania’s economy will decline by 3% in 2010, hurt by a five percentage point increase in the sales tax, the Austrian lender said in a presentation Friday.

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In 2009, Romanian gross domestic product shrank by a sharp 7.1%, reversing a 7% growth in the previous year.

The Romanian government recently raised the value added tax level to 24% from 19%, as part of an austerity pack aimed at boosting revenue and reducing the budget deficit.

For the Central and Eastern Europe, Erste expects a modest revival this year, largely supported by rising exports.

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