Romania’s economic status is growing ever more disquieting,
\namid pessimistic forecasts by the central bank and the European Commission’s
\neconomic report, which estimates that central and eastern European countries
\nwill have higher inflation rates this year than the rest of the EU. According to
\nBrussels, after a strong, 5.9% growth rate in 2021, Romania’s economy is likely
\nto slow down to 2.6% this year, as inflation erodes people’s incomes and Russia’s
\naggression in Ukraine affects economies, supply chains and investments.<\/p>\n
<\/p>\n
\n
<\/p>\n
For next year, the European Commission expects economic
\ngrowth to pick up slightly, to 3.6%, following a possible drop in inflation. Unemployment
\nis predicted to stay at around 5.5 %, with prices likely to reach a peak this
\nyear and gradually go down in 2023. Meanwhile, the public deficit will reach 7.5%
\nof GDP this year, possibly dropping to 6.3 % in 2023. <\/p>\n
<\/p>\n
\n
<\/p>\n
According to EU officials, this year’s inflation will
\nget to a record-high 8.9% in Romania, almost double the 4.1% rate in 2021, and
\nwill slow down to 5.1% in 2023. <\/p>\n
<\/p>\n
\n
<\/p>\n
In turn, the National Bank confirms the rise in
\ninflation and does not expect it to go below 10% until the second half of next
\nyear. Meanwhile, the National Statistics Institute confirms that in the first
\nquarter of this year the economic growth rate stood at over 5% compared to the
\nprevious quarter and 6.5% compared to the first quarter of last year. Nonetheless,
\nthe central bank adviser Lucian Croitoru believes that in the forthcoming
\nperiod Romania might be facing stagflation. This is more dangerous than extended
\ninflation, in that it also involves stagnant economic output.<\/p>\n
<\/p>\n
\n
<\/p>\n
Lucian Croitoru: The first half of the word comes from stagnation.
\nWhich is not necessarily the same as recession, it might only be a slow, 1.5-2.5%
\ngrowth, which is not something we are used to in Romania. So I think this is
\nvery possible. On the one hand, short-term inflation encourages production, even
\nstimulates a rise in budget revenues, but mind you, this is fuelled by
\ninflation and is not going to last. On the other hand, the war may entail lots
\nof challenges, it is unpredictable, we have no forecasts on how a conflict like
\nthis may end, with so many factors involved. But, as Hemingway put it, inflation
\nand war are always solutions to policies lacking principles.<\/p>\n
<\/p>\n
\n
<\/p>\n
If the Romanian economy
\nenters the predicted stagflation period, prices and unemployment will rise,
\nexpenditure will be low, life will be ever more expensive and economic
\ndifficulties will deepen. (AMP)<\/p><\/p>\n","protected":false},"excerpt":{"rendered":"
Economic growth forecasts are worsening at a fast rate<\/p>\n","protected":false},"author":106,"featured_media":83731,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[37738],"tags":[35241,29212,35171,29615,29488,35199,40553,30268,36582],"coauthors":[],"class_list":["post-92283","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-today-in-the-news","tag-bank","tag-economy","tag-forecast","tag-growth","tag-inflation","tag-national","tag-stagflation","tag-unemployment","tag-war"],"acf":[],"yoast_head":"\n