President Traian Basescu yesterday coldly announced during the Government's extraordinary meeting that the Romanian economy was going into recession, which means that instead of getting out of the crisis that hit businesses and asset value, we are sinking deeper into it. The statement came as a punch in the chest on a Sunday when Romanians were either sunbathing or planning their holidays.
This is the first time Basescu has publicly criticised the National Bank that presented optimistic estimates about the economic situation, forecasts that are contradicted by reality. The Government built its budgetary projection for this year on the estimates of the National Bank of Romania and of the International Monetary Fund, and now has to operate a new downwards budgetary adjustment, which means the state is not collecting the projected revenues and has to cut spending, otherwise it may find itself unable to pay salaries this autumn.
"My opinion is, although I have no final data to go by, that NBR's optimism in April is not grounded in the future trends of the economy and we will have a decline in the second quarter, too, which means going into recession according to all norms," Basescu told the Government.
Yesterday, NBR had Adrian Vasilescu, the governor's advisor, reply to the statement, saying that the central bank included in its scenario a decline of the economy for the first quarter, while it had hope for the second half of the year, when economic growth might stand at 0.1-0.2 percent. In May, governor Mugur Isarescu, whose estimates were close to the economic reality, stated he kept his hope for economic growth by the end of the year.
His optimism has remained almost unmatched on the market, while analysts are growing more and more pessimistic, reviewing their estimates downwards, towards a decline of the economy of 5 to 7 percent, as a result of the significant drop in exports and imports, services, retail and industrial output in April.
The decline of the economy in the first quarter, of 6.2 percent took even the most pessimistic of analysts by surprise; attaining the forecast by the authorities and the International Monetary Fund and the European Commission for this year, that is a 4 percent decline, is uncertain.
