Romania Economic Forecast

Romania Economic Outlook

September 8, 2020

GDP contracted at a record pace in Q2, as the coronavirus pandemic and associated lockdown measures wreaked havoc on the economy. Although a breakdown of the components is not yet available, both the external and the domestic sectors seem to have slumped. Industrial output nosedived throughout the quarter which, coupled with souring economic sentiment, points to a sustained decline in private sector activity. Moreover, retail sales took a significant hit in April-May, and recovered only limited ground in June. This, together with a rising unemployment rate and a notable weakening in wage dynamics, suggests that private consumption shrank considerably in Q2. On top of that, freefalling exports indicate depressed global demand. Turning to Q3, recovering but still downbeat business confidence in July-August and a further uptick in the unemployment rate in July indicate prolonged weakness.

Romania Economic Growth

The economy is projected to shrink markedly this year due to the fallout from the coronavirus pandemic. Lockdown measures are set to hammer domestic activity, while a weak economic environment in the EU and disrupted global value chains will weigh on the external sector. Frail fiscal accounts pose a further downside risk. Our analysts see the economy contracting 5.4% in 2020, which is up 0.1 percentage points from last month’s forecast, before expanding 4.6% in 2021.

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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