Romania

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In Q1 2021, GDP remained roughly at the level of the previous year (-0.2%). Information and communication technology was the fastest-growing sector, but industry also expanded rapidly. Net exports were the only negative item on the demand side. Imports of goods increased at double the speed of exports, as consumption recovered more quickly than production. Services trade produced surpluses, especially in the telecom and computer sector. A 10% expansion in investments has provided a boost to growth. FDI inflows worth EUR 2bn (3.4% of GDP) were a major item of good news, especially viewed against the capital withdrawal of 2020.

The growth momentum is expected to hold for the rest of 2021 and beyond, provided there is no severe COVID-related shutdown. Thus, we have revised our growth forecast upwards, to 5.2% in 2021 (from 3.8%). The V-shaped recovery will trigger a fall in unemployment and a return to labour shortages. Increased amounts of EU funds will support investment. External and internal factors have boosted inflation (3.5%) to beyond the central bank target of 2.5%, and that will trigger a gradual policy rate rise. The government may curb its plans for further fiscal expansion and seek to stabilise public debt at around 50% of GDP.
        FORECAST*
Main Economic Indicators201820192020202120222023
Population, 1000 persons194741937219300...
GDP, real change in %4.54.1-3.95.24.54.5
GDP per capita (EUR at PPP)198302169021300...
Gross industrial production, real change in %3.5-2.3-9.2...
Unemployment rate - LFS, in %, average4.23.95.04.84.54.0
Average gross monthly wages, EUR93610231067...
Consumer prices, % p.a.4.13.92.33.53.33.0
Fiscal balance in % of GDP-2.9-4.4-9.3-7.5-5.0-4.0
Public debt in % of GDP34.735.347.3...
Current account in % of GDP-4.6-4.9-5.2-5.2-4.6-4.0
FDI inflow, EUR m620565742255...
Gross external debt in % of GDP48.849.257.7...


Basic data are continuously updated.

* Forecasts are changed beginning of April, July and November.
See Press Conferences.

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Monthly Report No. 7-8/2021

Vasily Astrov, Alexandra Bykova, Rumen Dobrinsky, Selena Duraković, Richard Grieveson, Doris Hanzl-Weiss, Gabor Hunya, Branimir Jovanovic, Niko Korpar, Sebastian Leitner, Isilda Mara, Olga Pindyuk, Leon Podkaminer, Sandor Richter, Bernd Christoph Ströhm and Maryna Tverdostup
wiiw Monthly Report No. 7-8, July-August 2021
42 pages including 4 Tables and 15 Figures

Details

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ROMANIA: Modest slowdown, moderate recovery

Gabor Hunya
in: Darkest before the dawn?
wiiw Forecast Report No. Spring 2021, April 2021 , pp. 110-113
Details and Buy


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