The IMF report and Romania’s economic growth
The Romanian economy will register a higher growth in 2016 than estimated in the autumn of 2015, the IMF shows in its latest report.
România Internațional, 13.04.2016, 13:54
The IMF on Tuesday presented its report on the prospects of global economy, one day ahead of the start, in Washington, of the annual spring meeting of the IMF and the World Bank. As far as Romania is concerned, the IMF has revised upwards to 4.2% the estimates regarding the countrys GDP growth in 2016. In October 2015 the IMF had forecast a 3.9% growth of the Romanian economy.
According to the international financial bodys estimates, Ireland is the only country in Europe that will report a bigger economic growth in 2016 than Romania, namely of 5%. The IMF warns that the economic growth registered this year by Romania will be followed by a downward trend in 2017 putting economic growth at a merely 3.6%. However this remains one of the biggest economic growth rates in Europe, on a par with Ireland, Latvia and Poland. The secretary of state with the Department for Foreign Investments and Public-Private Partnership, Manuel Costescu, said in a public radio show that, against the backdrop of the accelerated economic growth, the Romanian authorities should focus also on the of the less developed regions of Romania. Manuel Costescu:
“I believe that now, when the economic growth pace stands at 4.2%, it is high time we also looked at the other regions which are economically backward, to help them report growth as well. Its a matter of education, infrastructure and thorough strategies. Now is the time to help these people.
As regards the evolution of consumption prices in Romania this year, the IMF revised its estimates at minus 0.4% for 2016, from minus 0.2% in October 2015, so Romania will be one of the few EU members to have a negative average annual inflation rate. For 2017 the IMF estimates a 3.1% growth of consumption prices, which is the highest growth rate among EU states. Also the IMF has revised its estimates related to Romanias current account deficit, from minus 1.5% in October last year to minus 1.7% in 2016. The current account deficit will grow in 2017, when it is going to reach minus 2.5%.
As to the unemployment rate, the IMF estimates it will drop from 6.8% in 2015 to 6.4% in 2016 to reach 6.2% in 2017. In turn, the World Bank forecasts that Romanias economic growth rate will accelerate to reach 4% in 2016, as it will be supported by the fiscal policy and the labour market reforms. However the World Bank warns against the risk of Romanias entering the excessive deficit procedure. On the other hand, on Saturday, the Standards&Poors international agency reconfirmed Romanias rating for the long-term government debt in hard currency, and in the national currency respectively, with a stable outlook.
(Translated by L. Simion)
