Global economic forecasts
The World Bank has this week upgraded its economic growth forecast for Romania in 2015.
Roxana Vasile, 11.06.2015, 14:34
This week the World Bank has upgraded to 3% its economic growth forecast for Romania this year, after issuing a lower estimate in January. This rate is above the global average of 2.8%. Additionally, in 2016 Romania is expected to report a 3.2% growth, and a 3.5% growth in 2017, which is however by 0.4% less than the original estimate made this past winter.
The economic progress of Romania, but also of the Czech Republic, have also been acknowledged by the EU Statistics Office Eurostat. The two countries have the biggest economic growth in the first quarter of this year, above the 4% mark. As compared to the same period of last year, Romanian and Czech economies went up by 4.2%.
The EUs economy grew overall by 1.5%, a growth due mostly to a 2.4% spike in Britains economic growth rate. Other European economies reported less spectacular growth rates: 1% in Germany, 0.7% in France and 0.1% in Italy. Nevertheless, Romanian agriculture, the countrys engine behind economic growth, risks facing a prolonged draught this harvesting season.
Given that agriculture accounts for 5 to 7% of Romanias GDP, this might overturn the positive growth forecast. Barely has summer set in and many crops are already withering away under the scorching sun. Romanias watershed has also decreased alarmingly, which raised fears regarding the minimum amount of water required for animal breeding, let alone farming. The most affected regions are the countrys east and south, where ground water reserves have hit a dangerous low.
The irrigation system built before 1989 is supplying water to barely 10% of the farmland. In Suceava, northeastern Romania, farmers expect the potato yield to go down to a third of the original harvest estimate. The situation is just as dire in Bacau in the east, where corn production is particularly affected by the dry season. Most wheat crops have begun to dry off, which, specialists argue, might dramatically reduce harvesting figures. On the bright side, according to the National Institute of Statistics, Romanian industry went up by 3.4% in the first quarter of 2015 as compared to the same period of 2014. The manufacturing industry reported the highest increase, of 3.9%.
