Romania's economy contracted 0.1 percent in the first quarter of 2012 compared with Q4, 2011, which means the country has slipped into technical recession because of two consecutive quarters of falling Gross Domestic Product (GDP).

According to the estimates released on Tuesday by Romania's National Statistics Institute (INS), Romania's Q1, 2012 GDP was down 0.1 percent in real terms from Q4, 2011 in seasonally adjusted terms. Compared with the similar quarter of 2011, the GDP was up 0.3 percent in unadjusted terms and 0.8 percent in seasonally adjusted terms.

The interim spring projections released by the National Economic Projections Board shows that Romania should close the year 2012 on an economic growth of 1.7 percent, with the GDP estimated to reach RON 609.6 billion.

Head of the International Monetary Fond (IMF) mission for Romania Jeffrey Franks says Romania's economy should advance 1.5 percent in 2012, down from the previous projections of the IMF that read a 1.8-percent rise in the GDP in 2012. Franks said recently, at the end of a fifth review of a precautionary stand-by arrangement between Romania and the IMF, that IMF's vision of the Romanian economy was unchanged compared with three months before, that IMF was expecting a positive economic growth of 1.5 percent in 2012 and even more in 2013 given that the European economy is expected to recover in 2013. He also said that 1.5 percent is not a significant positive rise but is would be significantly more than the European average, given that the Eurozone is in a recession.

Early this March, then Finance Minister Bogdan Dragoi said the Romanian Government is counting on a 1.52-2 percent rise in 2012 from 2011 although Romania could slip into technical recession at the end of the first quarter of 2012.

Technical recession is defined by two consecutive quarters of economic decline. Provisional data released by the INS indicate that Romania's economy declined 0.2 percent in the last quarter of 2011as well.

In 2011, Romania's economy closed the year on a 2.5-percent economic growth.