Romania GDP Could Fall By 1%-2% In 2010 – Fin Min

Romania’s newly introduced 24% value added tax will take its toll on the economy this year, which could decline by 1% to 2%, Finance Minister Sebastian Vladescu said Tuesday.

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"We have to analyze the effect of introducing a 24% VAT to see if recession will be of -1%, -1.5% or -2% this year," Vladescu told reporters.

The International Monetary Fund estimates Romanian economy will contract by around 2% this year and will pick up modestly in 2011, head of the National Council of Private SMEs, Ovidiu Nicolescu said earlier Tuesday, after talks with the IMF mission to Bucharest.

In its June forecast, the IMF said Romanian economy is expected to stagnate or decline by 0.5% this year, from a 7.1% contraction a year earlier.

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