ECONOMY

In Brief

Romanian retail sales decline slows down in November The decline in Romanian retail sales slowed for a second consecutive month in November, adding to signs the economy may recover this year. Retail sales fell 9 percent from a year earlier in November after declining 9.1 percent in October and 13.9 percent in September, the Bucharest-based National Statistics Institute said in an e-mail yesterday. On the month, sales fell 0.2 percent, after dropping 1.5 percent in October. The economy contracted an annual 7.1 percent in the third quarter, compared with a decline of 8.7 percent in the second, the institute said last month. The fall in consumption slowed to an annual 1.1 percent from 15.7 percent in the second quarter. Romania’s government, which was approved by Parliament on December 23 after months of political infighting left the country without leadership, predicts economic growth of 1.5 percent this year after a contraction of as much as 7 percent in 2009. The International Monetary Fund, which is leading a 20-billion-euro ($30 billion) bailout package for Romania, raised its 2009 estimate to an economic decline of 7.5 percent from an earlier estimate of 8.5 percent. The government has forecast the recession may end as early as this quarter. (Bloomberg) PDMA schedules Greece’s first T-bill auction for the year Greece will auction 26- and 52-week treasury bills on January 12 as part of a borrowing plan to plug fiscal gaps and refinance debt, its first sortie in capital markets this year, its debt agency (PDMA) said yesterday. Greece plans to borrow 53 to 54 billion euros ($76-77 billion) this year, less than last year’s 66 billion, the head of PDMA told Reuters earlier this week. PDMA will also auction 13-week T-bills on January 19. The debt agency did not disclose the amounts it will seek to raise. About 4.2 billion euros’ worth of T-bills mature this month. (Reuters) Rate cuts Romania, Russia, Serbia and Hungary are likely to keep cutting interest rates this year, even while other developing nations are set to raise them, as inflation remains «benign» on weak consumer demand, UniCredit SpA said. Romania, the second-poorest nation in the European Union, will probably reduce its main central bank interest rate a further 1 percentage point to 6.5 percent by the end of 2010, after unexpectedly lowering it half a point to 7.5 percent yesterday, Dmitry Gourov, an economist at UniCredit in Vienna, wrote in a research note on Wednesday. Serbia’s central bank may reduce its key rate to 7.5 percent from 9.5 percent, while Hungary is likely to lower its main rate 0.75 percentage point to 5.5 percent from 6.25 percent, with 0.5 percentage points of the change coming in the first half of the year, according to UniCredit. Russia’s one-day policy repo rate is likely to fall 1 percentage point to 5 percent from 6 percent, according to Gourov. The four countries have among the highest interest rates in Eastern Europe. In Romania, the central bank «seems to be quite optimistic about achieving its inflation target in 2010 relying on the ongoing disinflation trend,» Gourov wrote. «The inflation outlook is set to remain benign» in Serbia, Hungary and Russia «with average inflation edging down in 2010 and consumer demand remaining weak,» the note said. (Bloomberg)