Romania Economic Forecast

Romania Economic Outlook

September 3, 2019

GDP grew solidly in the second quarter, overshooting expectations, although was still below the first quarter’s pace. Private consumption likely remained in the driver’s seat: The unemployment rate came in at an over decade low in Q2 and retail sales grew steadily, although slower than in Q1. However, the industrial sector was downbeat, with production contracting for the first time since 2009. Moreover, the country’s political scene has become more uncertain after the junior coalition partner, ALDE, withdrew from the alliance on 26 August. The implications are currently up in the air, given the country’s already busy election cycle and the seemingly limited appetite for a snap vote or to address fiscal challenges. A confidence vote is expected to be held before mid-October and the possibility of a caretaker government, early elections or a revamped coalition are all still on the table.

Romania Economic Growth

The outlook was revised up a notch this month, following a solid outturn in Q2. Growth is expected to remain healthy as a tight labor market fuels consumption, and thanks to improved private-sector and EU-led investment. That said, slowing exports against a backdrop of subdued external demand will eat into momentum. The precarious fiscal position is a key risk to prospects ahead. Our analysts see growth at 3.9% in 2019, which is up 0.1 percentage points from last month’s forecast, and 3.0% in 2020.

Romania Economy Data

20132014201520162017
Population (million)20.020.019.919.819.6
GDP per capita (EUR)7,1977,5398,0748,6329,532
GDP (EUR bn)144150160171187
Economic Growth (GDP, annual variation in %)3.53.43.94.87.0
Consumption (annual variation in %)1.94.25.88.410.0
Investment (annual variation in %)-5.83.37.20.03.3
Industrial Production (annual variation in %)7.96.22.81.87.8
Retail Sales (annual variation in %)0.56.49.512.410.8
Unemployment Rate7.16.86.85.94.9
Fiscal Balance (% of GDP)-2.2-1.3-0.7-2.7-2.7
Public Debt (% of GDP)37.639.237.837.335.2
Money (annual variation in %)8.88.49.49.811.5
Inflation Rate (CPI, annual variation in %, eop)1.60.8-0.9-0.53.3
Inflation Rate (HICP, annual variation in %)3.21.4-0.4-1.11.1
Inflation (PPI, annual variation in %)-  -  -  -  -  
Policy Interest Rate (%)4.002.751.751.751.75
Stock Market (annual variation in %)26.19.1-1.11.29.4
Exchange Rate (vs EUR)4.484.484.524.544.66
Exchange Rate (vs EUR, aop)4.424.444.444.494.57
Current Account (% of GDP)-1.1-0.6-1.2-2.0-3.4
Current Account Balance (EUR bn)-1.5-1.0-2.0-3.6-6.0
Trade Balance (EUR billion)-5.8-6.6-7.8-9.3-12.2
Exports (EUR billion)43.946.849.152.257.2
Imports (EUR billion)49.753.456.961.569.4
Exports (annual variation in %)10.06.64.96.39.6
Imports (annual variation in %)1.07.46.68.112.8
International Reserves (EUR)32.532.232.234.233.5
External Debt (% of GDP)68.163.057.454.552.0

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Romania Facts

ValueChangeDate
Bond Yield4.070.23 %Sep 04
Exchange Rate4.29-0.34 %Sep 04
Stock Market9,262-0.59 %Sep 04

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