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Romania grows 6% in 2007 vs 7.7% in ‘06

Romania’s economic growth slowed slightly less than expected in 2007, the country’s first year in the European Union, to reach 6%, statistical data showed on Tuesday.

Analysts polled by Reuters had forecast growth of 5.9%, compared with 7.7% in 2006. “This is not a major slowdown,” said Simon Quijano-Evans from UniCredit MIB in Vienna. “It’s a result of a strong base effect in 2006 and, secondly, of a slowdown in agriculture.” Romania has grown robustly in recent years driven by robust foreign investment, efforts by firms to modernize and strong household spending as Romanians race to improve living standards.

However, the spending spree has fanned significant import growth, widening the external shortfall and raising concerns that if foreign cash dries up the country may encounter financial problems. GDP was up 6.6% year-on-year in the Q4 of 2007 compared with 5.7% in the Q3. The economy is expected to grow 6% this year. The statistics office, which will issue a detailed GDP breakdown on March 12, said nominal GDP was 404.7 billion lei ($163.3 billion) last year. The lei currency showed little reaction to the data, trading at 3.7139 per euro at 0835 GMT, pulling back from a one-month low of 3.7870 hit on Monday. (Reuters)