IMF revises Romania’s economic growth forecast to 2.4 pct

The International Monetary Fund has revised the latest estimation on Romania’s economic progress (2.8 percent in July 2014) to 2.4 percent as per the World Economic Outlook report released on 7 October. Although anticipating a slower growth rate, the estimation is improved compared to the initial prediction of 2.2 percent.

For the next year, though, the IMF maintained the projection, expecting an advance by 2.5 percent of the GDP.

According to the same report, following an inflation rate of 4 percent in 2013, domestic consumer prices are supposed to increase by 1.5 percent in 2014, while for 2015 it is foreseen an increase by 2.9 percent. On the other hand, the IMF foresees a drop by 1.2 percent in the current account balance this year, followed by a further decline in 2015 (by 1.8 percent). The other indicator taken into account, the unemployment rate, will not see but marginal changes in 2014, as well as in 2015 – it is expected to reduce from 7.3 to 7.2 percent this year and to 7.1 percent next year.

Following last year’s performance when Romania’s gross domestic product grew beyond expectations, the evolution in the first half of the year brought Romania in technical recession, as the GDP declined by 0.2 percent in Q1 2014 over the previous quarter and by 0.9 percent in Q2 2014 compared to Q1, respectively. Thus, the optimism generated by last year’s 3.5 percent GDP advance moderated after these developments, the Government, along with the other financial institutions revising down the estimates on the GDP growth, stabilized at an average of about 2.5 percent.