ING: Jobless Figures Don’t Reflect Romanian Economic Reality

04.22.2011 By Florentina Dragu

Romanian declining unemployment rate “is spectacular”, but it doesn’t reflect the economic reality in the country, ING Bank said in a report Friday.

Romanian declining unemployment rate "is spectacular", but it doesn't reflect the economic reality in the country, ING Bank said in a report Friday.

The jobless rate fell to 5.92% at the end of March, from 6.58% a month earlier and 8.36% in March 2010.

"The adjustment is even more spectacular since we estimate it had almost no support from seasonal factor. But, similar to the past months, we believe the decrease in the registered unemployment tells an untrue story about Romania's economy," ING said.

The lender said the jobless rate has decreased for 12 consecutive months, with the number of registered unemployed falling by 225,000 people. On the other hand, the number of employees has declined by 210,000 in the first 10 of these months.

The data for February and March are not yet available.

According to ING, the diverging dynamics could be explained if there would be an increase in the grey economy, but, according to the methodology used by the International Labor Organization (ILO), this is not the case.

ILO figures showed Romanian unemployment rate rose to 7.3% in the last quarter of 2010, from 6.9% a quarter earlier.

"Accordingly, we doubt that the recent extension of the downtrend in the registered unemployment rate is a sign of improving economic activity," ING said.