The Central and the East European economies will spring back to growth in 2010, after having contracted beyond expectations in 2009, daily Ziarul Financiar daily informs, citing a report of the International Monetary Fund (IMF). In its latest World Economic Outlook, the IMF revised up its growth forecasts for this year and the next. The Fund now expects the world output to contract by 1.1% in 2009 before growing by 3.1% in 2010.

In emerging Europe, following a contraction in real GDP of 5.25% in 2009, a return to positive growth is expected in 2010, notes the document. The recovery is expected to be slower than in other emerging regions because many economies will continue to face serious adjustment problems, given that cross-border capital flows will likely remain lower for some time. The IMF expects the average decline this year to be 4.3% in Central and Eastern Europe, Slovakia, Slovenia and the Czech Republic not included. In its previous report, IMF had forecast a 2.9% drop in 2009, and increased its 2010 growth projection to a rate of 0.5% from 0.3%, in April. East European economies the growth of which outpaced Western economies in this decade are now affected by the drop in the demand for exports and capitalwithdrawal. Eastern Europe was extremely affected by the decrease in the capital flows, the IMF report reads. This triggered a steep decline in Baltic economies, Bulgaria and Romania, although the exchange rates cushioned the shock in the economies with flexible regimes,

Ziarul financiar writes, citing the above said report. The Fund maintained its forecast on the 8.5% shrinkage of Romania's GDP this year, followed by a slight growth of 0.5% in 2010. It should be noted that the IMF engaged about USD 75 billion of the USD 133 billion worth of stabilization programs run at global level, inclusively for Hungary, Latvia, Serbia and Romania.

Source: Agerpres.