Romania Economic Forecast

Romania Economic Outlook

October 5, 2021

A second release confirmed that GDP expanded solidly in Q2, largely on the back of firming domestic activity. That said, slower growth in sequential terms highlights that the annual reading was flattered by a low base effect. Turning to Q3, available indicators point to a bumpy start: Industrial output increased at a markedly slower rate at the outset of the quarter, which, coupled with easing export growth, hints at downbeat private sector activity. Moreover, private consumption appeared to wane, as evidenced by weaker growth in retail sales and higher unemployment in July. Moving forward, record-high Covid-19 infection rates in late September and a suffocated healthcare system are bound to weigh on activity heading into Q4. On a brighter note, on 27 September the European Commission approved the country’s recovery plan, paving the way for the disbursement of EUR 29.2 billion of EU funds.

Romania Economic Growth

GDP will expand robustly this year, supported by the release of pent-up domestic and foreign demand, before growth moderates next year in line with a fading base effect. However, risks are tilted to the downside: A still-low vaccination rate renders the country highly susceptible to Covid-19 flare-ups, while lingering political instability further clouds the outlook. Our analysts see the economy growing 7.0% in 2021 and 4.7% in 2022, which is down 0.1 percentage points from last month’s forecast.

Romania Economy Data

2015 2016 2017 2018 2019
Population (million)19.919.819.619.519.5
GDP per capita (EUR)8,0748,6329,54510,47211,430
GDP (EUR bn)160171188204223
Economic Growth (GDP, annual variation in %)3.94.87.14.44.1
Consumption (annual variation in %)5.88.410.07.26.0
Investment (annual variation in %)7.20.03.5-1.017.9
Industrial Production (annual variation in %)2.81.87.83.5-3.3
Retail Sales (annual variation in %)9.512.410.85.57.2
Unemployment Rate6.85.95.04.23.9
Fiscal Balance (% of GDP)-0.6-2.6-2.6-2.9-4.3
Public Debt (% of GDP)37.837.335.134.735.2
Money (annual variation in %)9.49.811.58.910.9
Inflation Rate (CPI, annual variation in %, eop)-0.9-0.53.33.34.0
Inflation Rate (HICP, annual variation in %)-0.4-1.11.14.13.9
Inflation (PPI, annual variation in %)-  -  -  -  -  
Policy Interest Rate (%)1.751.751.752.502.50
Stock Market (annual variation in %)-1.11.29.4-4.835.1
Exchange Rate (vs EUR)4.524.544.664.664.78
Exchange Rate (vs EUR, aop)4.444.494.574.654.75
Current Account (% of GDP)-1.2-2.0-3.4-4.4-4.6
Current Account Balance (EUR bn)-2.0-3.6-6.0-9.2-10.2
Trade Balance (EUR billion)-7.8-9.3-12.2-14.8-17.0
Exports (EUR billion)49.152.257.261.963.0
Imports (EUR billion)56.961.569.476.780.0
Exports (annual variation in %)4.96.39.68.21.8
Imports (annual variation in %)6.68.112.810.54.3
International Reserves (EUR)32.234.233.533.132.9
External Debt (% of GDP)59.055.352.048.847.4

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Romania Facts

Value Change Date
Bond Yield4.490.23 %Dec 31
Exchange Rate4.26-0.34 %Dec 31

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