Romania Economic Outlook
May 12, 2020
Despite starting 2020 on a healthy note, the economy has been derailed by the coronavirus outbreak and the country-wide lockdown introduced in late March to curb its spread. In particular, consumer spending, which has been the main driver of growth in recent years amid rapid wage increases and low unemployment, will be pummeled due to the state of emergency that was extended until 15 May. And although the government will begin relaxing containment measures from then onwards, domestic demand is likely to remain suppressed. Meanwhile, in the latter half of April, Fitch Ratings and Moody’s retained the country’s credit rating at the lowest investment grade of BBB- and Baa3, respectively, but downgraded their outlook from stable to negative due to deteriorating fiscal metrics. The government’s economic response to the pandemic, coupled with weaker revenues, has reduced the possibility that the 40% pension hike scheduled for September will go through, though uncertainty still abounds and will remain under close market watch ahead.Romania Economic Growth
The economy is set to fall into recession this year as the Covid-19 pandemic has forced manufacturing companies to shut down operations, disrupted supply chains, and sequestered spending by households and firms. The already-fragile and worsening fiscal outlook, which raises the possibility of a credit rating downgrade to junk status, is also a major risk ahead. Our analysts see the economy contracting 5.5% in 2020, which down 2.4 percentage points from last month’s forecast, and expanding 5.1% in 2021.Romania Economy Data
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Romania Facts
| Value | Change | Date | |
|---|---|---|---|
| Bond Yield | 4.49 | 0.23 % | Dec 31 |
| Exchange Rate | 4.26 | -0.34 % | Dec 31 |
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Romania Economic News
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Romania: Inflation falls to over two-and-a-half year low in May
June 12, 2020
Consumer prices rose a seasonally-adjusted 0.1% over the last month in May, a smaller increase than April's 0.3% rise.
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Romania: Industrial output contracts at sharpest pace on record in April
June 12, 2020
Industrial output fell 38.6% year-on-year in April (March: -14.5% yoy) marking the sharpest contraction on record.
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Romania: Growth slows to near six-year low in Q1
June 9, 2020
A second reading confirmed economic activity waned in the first quarter, with GDP growth moderating to 2.4% year-on-year, down from Q4’s 4.3% expansion.
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Romania: NBR cuts rates in unscheduled meeting in May
May 29, 2020
In an unscheduled meeting held on 29 May, the National Bank of Romania (NBR) cut the policy rate by 25 basis points to 1.75% and the lending facility (Lombard) rate by 25 basis points to 2.25%.
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Romania: Growth records slowest expansion since Q2 2014
May 15, 2020
GDP growth moderated to 2.4% year-on-year in the first quarter from the 4.3% expansion tallied in the final quarter of 2019, according to a flash estimate released by the Statistical Institute on 15 May.
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