The International Monetary Fund (IMF) has revised its estimates for the Romanian economy growth to 4.2% from 3.8% – previous estimate for this year, and to 3.4% for 2018, from 3.5%, according to the latest global economic outlook report, World Economic Outlook 2017, published Tuesday.
The Government drafted the budget and government program based on a gross domestic product (GDP) increase of 5.2% in 2017, but all other forecasts are much lower, between 3.5 and 4.5%.
In response, the Romanian Minister of Finance Viorel Stefan pointed out on 12 April that Romania could see higher economic growth in 2017 than the estimated 5.2% of GDP, with an important contribution from the agriculture.
The advance of the Romanian economy of more than 4% in 2017 is supported by further stimulation of the private consumption following a new phase of fiscal easing and wage increases, according to the IMF.
„In the absence of a strong push for investment, an acceleration of the structural reforms and strengthening of the institutions, a slowdown of growth is expected in the mid-term,” said the IMF officials at the end of the visit in Romania in March.
The IMF has also revised the estimates of the unemployment rate in Romania, whose decline in 2017 will bring this indicator to 5.4%, compared to 6.2% as previously estimated, and to reach 5.2% in 2018.
On the other hand, the new estimate of consumer prices in Romania in 2017 revised downwards the growth to only 1.3%, compared to 1.7%, as forecasted by the IMF in the autumn.
However, the rate of price increase is expected to speed up in 2018 to 3.1%, above the previously forecasted level of 2.5%.
The IMF has maintained unchanged the current account deficit estimate at minus 2.8% in 2017. The current account deficit would decline to 2.5% of GDP in 2018, a different estimate than the autumn forecast of 3.2%.
Rest of the world
Romania would have the second largest economic growth in Europe this year after Iceland (5.7%), according to the global economic outlook outlined by the IMF.
Europe will see an average economic growth of 2%, and Emerging Europe, which includes Romania, will register a 3% GDP growth.
The IMF believes that the prospects for the Emerging Europe economies are „relatively favourable, except for Turkey. On average, the entire group of emerging economies will grow by 3.3% in 2018.
World economic growth is forecasted at 3.5% in 2017 and 3.6% in 2018, 10 basis points up in 2017 compared to last October’s estimate.”
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