The World Bank has revised its initial estimation on Romania’s economic progress, anticipating and advance by 2.9 percent of the Gross Domestic Product this year, according to the Global Economic Prospects report published on January 14, 2015. In June 2014, the financial institution forecasted a higher growth, of 3.2 percent, however, the growth rate recorded over the past year, which was below initial expectations, determined a revision of the forecast.
Last year, Romania’s economy has decelerated to a growth pace of 2.6 percent, after the year before, the GDP expanded by 3.5 percent, exceeding all expectations.
Also, within the next year, Romania’s GDP is expected to increase by 3.2 percent, followed by a 3.9 percent economic growth in 2017.
“In Hungary and Romania, domestic demand is expected to increasingly drive growth, supported by improving labor market conditions and consumer confidence, and by public investment in infrastructure largely financed by the EU”, states the Global Economic Prospects analysis.
The report also observes that many countries in the CEE region - Bulgaria, Croatia, the Czech Republic, Hungary, and FYR Macedonia - are in or near deflation due to negative output gasps, major cuts in regulated energy prices, and declining food and fuel prices.
“Falling food prices reflected bumper harvests (especially in Bulgaria and Romania), as well as weaker demand because of the Russian ban on food imports”, is added.
Overall, the world GDP rose to 2.6 percent in 2014, the World Bank expecting a 3 percent growth in 2015 and 3.3 percent in 2016, supported by gradual recovery in high-income countries, low oil prices, and receding domestic headwinds in developing countries.