Romanian Positive Econ Pace Might End In Two Yrs -Ctrl Bk Official

Romania has been registering an economic growth since 1999 to the present. Also, the country’s gross domestic product GDP has ranged between 4% and 8% since 2001 but this situation "would not last forever" and the positive economic pace could last one or two more years.

"The EUR17 billion current account deficit could put an end to the positive economic pace reported in the last nine years, and we should be aware this situation could not last forever," Radulescu added.

The country’s current account deficit stood at nearly 14% of GDP in 2007.

Radulescu stressed upon the EUR130 million difference between the first-quarter EUR400 million current account deficit and the EUR270 million foreign direct investments.

Domestic misbalances arise from what the Romanian economy is offering and what it is expecting, central bank governor Mugur Isarescu said.

"The Romanian society got used to targeting salary hikes between 16% and 18%, which is too much as compared to the country’s economic output, the difference  generating inflation. High inflation puts one out of the euro-zone, for being contagious," Isarescu added.

Romania’s current account deficit widened 7.5% on the year in January-April to EUR4.842 billion, from EUR4.504 billion in the year-earlier period, on higher trade deficit.

Last year, Romania’s current account deficit widened 66.1% on the year to EUR16.87 billion from EUR10.15 billion in 2006, mainly due to a larger trade deficit.

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