Economic Growth in Romania

Leyla Cheamil, 05.10.2016, 13:16

This year, Romania will register the highest economic growth rate in Europe: 4.9%. This optimistic estimate was made by the International Monetary Fund, which revised upwards, to 5%, its forecast regarding Romanias economic development this year. In April, the National Forecasting Committee, subordinated to the Romanian Finance Ministry, whose forecasts are the basis on which the Government makes its own budgetary and economic planning and forecasting, estimated a 4.2% growth, just like the IMF and the European Commission had done.

In September, the National Forecasting Committee also revised its forecast up to 4.8%, following the unexpected growth in the first half of the year. According to the latest World Economic Outlook report, made public on Tuesday, the IMF warns that the economic growth peak that Romania registered in 2016 will be followed in 2017 by a slowdown expected to reach 3.8%, slightly above the estimated 3.6% rate announced in April. But even so, next year the country will register the highest economic growth rate in Europe.

At the same time, for 2018, the IMF estimates that the Romanian economy will register a 3.3% growth rate. On the other hand, the IMF has also changed its forecasts regarding the evolution of consumption prices in Romania this year. Thus, the minus 0.4% forecast in April was revised upwards to minus 1.5%, which means that Romania and Bulgaria will rank first in the EU in terms of annual negative inflation rate.

Still, for 2017, the IMF believes that consumption prices in Romania will go up, registering a growth of 1.7%, and will keep on growing in 2018 as well, up to 2.5%. The IMF has also revised upwards the forecasts regarding the current account deficit in 2016, from 1.7% in April to 2%. The deficit will grow next year, to reach an estimated 2.8% as compared to the 2.5% rate estimated in April. In 2018, the deficit would exceed the threshold of 3% of the GDP, to reach 3.2%.

As regards the unemployment rate, the IMF has maintained the forecast of 6.4% this year, and 6.2% next year.