Economic Stabilisation In H209, Expect A Weak Recovery

According to a flash estimate, the Romanian economy shrank by 8.8% y-o-y during Q209, marking an acceleration in the rate of decline since Q109 and confirming its place as one of the worst positioned economies in CEE. Given the rapidity and magnitude of decline so far, and likely inventory re-stocking in H209, we believe that the business cycle is closing to reaching its nadir. However, we caution that the recovery will look somewhat anemic owing to a protracted period of weak domestic demand, with financial stability still under threat in the meantime as global deleveraging continues apace

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