The Romanian economy at the start of 2024
The Romanian economy grew 1.8% in 2023
Roxana Vasile, 10.01.2024, 14:00
Last year the Romanian economy went up 1.8%, which is however 0.8% less than estimated, reads a recent World Bank report. Also, in January – November 2023, Romanian exports totalled nearly EUR 87 bln, and imports over EUR 112 bln. In other words, exports rose by 2% while imports dropped by over 3% compared to the corresponding period of last year, according to data made public by the National Statistics Institute.
Even so, the trade deficit exceeded EUR 25 bln last year, in spite of getting more than EUR 5 bln smaller. The economic analyst Constantin Rudniţchi says the deficit primarily narrowed due to the drop in the prices of the energy imported by Romania and to a slow-down in consumption:
Constantin Rudniţchi: „The good news, if any, is that the trade deficit for the first 11 months of last year dropped compared to the previous year. This decrease is owing to a slow-down in consumption, because, lets not forget, some of the trade balance deficit comes from consumer goods. Obviously, some other part of the deficit is due to industrial goods, but consumer goods have their contribution to the deficit. So on the one hand we saw a decrease in consumption, and implicitly in the deficit. And on the other hand, we have reason to hope (because we dont have all the data yet), the Romanian economy is beginning to produce more goods that are used domestically.”
The analyst Constantin Rudnițchi believes that, for the trade deficit to keep its encouraging trend, public policies are needed which focus on major sectors, such as the foodstuffs, chemical products and the automotive industry.
As for the future, the World Bank adjusted downwards its estimates on the Romanian economy, predicting a GDP growth by 3.3% and 3.8% in 2024 and 2025 respectively. In fact, according to the World Bank, the global economy will slow down for the 3rd consecutive year, to 2.4% – the slowest pace since the Covid-19 pandemic. For 2025, the global economic growth is expected to reach an encouraging 2.7%, but even in this case a downward adjustment was operated from the 3% estimate made public last June, especially because of the downturn experienced by the worlds most advanced economies.
Under these circumstances, the goal of ending extreme poverty by 2030 seems impossible to reach, the World Bank concludes. One way to encourage economic growth, especially in emerging and developing countries, the institution says, is to step up investments in clean energy and adapting to climate change. (AMP)
