The International Monetary Fund upgrades Romania’s growth rate forecast for 2017.
The International Monetary Fund is optimistic as regards the Romanian economy, which the institution expects to grow significantly both this year and in 2018. The most recent World Economic Outlook report, released on Tuesday, includes an upward adjustment of the institution's estimates with respect to the economic growth in Romania in 2017 from 4.2% to 5.5%. The IMF also expects the Romanian economy to grow in 2018 as well, by up to 4.4%, as against the 3.4% forecast in April.
These optimistic figures have been prompted by a significant increase in investments, trade, and industrial output. Another piece of good news from the IMF is that the unemployment rate is expected to go down, to 5.3% this year and to 5.2% in 2018. Commenting on these estimates, the economic analyst Constantin Rudnitchi had this to say:
"We are obviously pleased to see these forecasts, but we need to find alternative growth engines. Specifically, apart from consumption and industry, we should encourage public investments, private investments and, why not, the services sector, which has seen good performances as well. And we should not overlook the developments in the Eurozone, which is our main trade partner. And here we have seen a slight, moderate growth. So this is of course a very good growth cycle for Romania, although there are signs of overheating, or even signs that as of next year this growth will slow down."
On the other hand, the IMF expects consumer prices to go up at a slower rate this year, before picking up again next year. While this year consumer prices will only increase by 1.1%, next year the increase rate will likely reach 3.3%. The international financial institution has also adjusted its estimates concerning Romania's current account deficit, from 2.8% forecast in April to 3% for this year, and from 2.5% to 2.9% for 2018. Also, according to the latest World Economic Outlook, Romania and Iceland are expected to report the highest economic growth rate in Europe this year, of 5.5%. Europe is forecast to see an overall economic growth rate of 2.5%, whereas the GDP of Emerging Europe, the region that includes Romania, will go up by 4.5%.
The IMF estimates largely coincide with the data made public by the National Statistics Institute. On Tuesday, this latter body revised its figures for the growth rate in the second quarter of the year from 5.9% to 6.1%. According to the National Statistics Institute, in the first half of 2017 the Gross Domestic Product was 5.9%, which is higher than in the corresponding period of 2016.
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