Romania buildings

Romania Economic Forecast

Romania Economic Outlook

After slowing in Q3, annual growth picked up in Q4, according to preliminary data. The full breakdown for Q4, due on 8 March, is likely to show solid performances in investment activity and private consumption on the back of EU funds inflows and accelerating annual retail sales growth, respectively. Turning to Q1 this year, annual growth is set to slow. Another rate hike from the NBR in January is likely putting additional downward pressure on activity, while a decline in economic sentiment and hiring intentions in January–February versus the Q4 average bodes poorly for growth. That said, a sharper-than-expected deceleration in January’s inflation print, coupled with minimum wage and pension increases introduced in the same month, will have supported private consumption somewhat.

Romania Inflation

Inflation fell to 15.1% in January (December: 16.4%), undershooting market expectations. A deceleration in non-food goods prices more than offset accelerating food and services prices. Inflation should return to single digits by Q3 2023 due to lower demand growth and the energy price cap, but the impact of these will be partially offset by minimum wage and pension hikes.

Romania Economic Data

2017 2018 2019 2020 2021
Population (million) 19.6 19.5 19.4 19.3 19.2
GDP (USD bn) 210 243 251 251 285
GDP per capita (USD) 10 12 12 13 14
GDP (EUR bn) 186 206 224 221 241
GDP per capita (EUR) 9 10 11 11 12
GDP (RON bn) 852 959 1 1 1
Economic Growth (Nominal GDP, ann. var. %) 13.2 12.6 10.9 0.3 11.3
Economic Growth (GDP, ann. var. %) 8.3 5.8 3.8 -3.2 5.9
Private Consumption (ann. var. %) 11.6 9.3 3.2 -3.7 8.2
Government Consumption (ann. var. %) 3.1 4.9 7.9 0.6 2.0
Fixed Investment (ann. var. %) 5.4 0.2 12.4 1.4 2.0
Exports (G&S, ann. var. %) 7.9 5.3 4.6 -9.4 12.8
Imports (G&S, ann. var. %) 11.5 8.7 8.8 -5.8 15.4
Industrial Production (ann. var. %) 8.6 5.0 -3.6 -9.5 7.4
Retail Sales (ann. var. %) 10.8 5.5 7.2 2.3 10.1
Wages (ann. var. %) 14.8 35.4 13.0 6.4 7.1
Unemployment (% of active population, eop) 5.7 5.0 4.9 6.3 6.0
Unemployment (% of active population, aop) 6.1 5.3 4.9 6.1 5.6
Fiscal Balance (% of GDP) -2.5 -2.8 -4.3 -9.2 -7.1
Public Debt (% of GDP) 35.3 34.5 35.1 46.9 48.9
Money (ann. var. of M2 %) 11.5 8.9 10.9 15.3 15.8
Inflation (CPI, ann. var. %, eop) 3.3 3.3 4.0 2.1 8.2
Inflation (CPI, ann. var. %, aop) 1.3 4.6 3.8 2.6 5.0
Inflation (HICP, ann. var. %, aop) 1.1 4.1 3.9 2.3 4.1
Inflation (Core, ann. var. %, eop) 2.7 2.7 4.1 3.8 4.8
Inflation (PPI, ann. var. %, aop) 3.5 5.0 4.0 0.0 14.9
NBR Reference Rate (%, eop) 1.75 2.50 2.50 1.50 1.75
10-Year Bond Yield (%, eop) 4.42 4.91 4.51 3.08 5.26
Stock Market (ann. var. of BET %) 9.4 -4.8 35.1 -1.7 33.2
Exchange Rate (RON per USD, eop) 3.89 4.07 4.26 3.97 4.37
Exchange Rate (RON per USD, aop) 4.05 3.94 4.24 4.24 4.16
Exchange Rate (RON per EUR, eop) 4.67 4.66 4.79 4.87 4.95
Exchange Rate (RON per EUR, aop) 4.57 4.65 4.75 4.84 4.92
Current Account Balance (EUR bn) -5.8 -9.5 -10.9 -10.9 -17.5
Current Account Balance (% of GDP) -3.1 -4.6 -4.9 -4.9 -7.2
Merchandise Trade Balance (EUR bn) -12.8 -15.3 -17.9 -18.9 -23.1
Merchandise Exports (EUR bn) 57.2 61.8 63.1 57.6 70.2
Merchandise Imports (EUR bn) 70.0 77.2 80.9 76.5 93.3
Merchandise Exports (ann. var. %) 9.6 8.1 2.0 -8.7 21.9
Merchandise Imports (ann. var. %) 13.2 10.2 4.9 -5.4 22.0
Foreign Direct Investment (EUR bn) 4.5 5.4 5.2 2.8 7.6
International Reserves (EUR bn) 37.1 36.8 37.5 42.5 45.8
International Reserves (months of imports) 6.4 5.7 5.6 6.7 5.9
External Debt (EUR bn) 97.4 99.8 109.8 126.7 136.6
External Debt (% of GDP) 52.3 48.4 49.0 57.5 56.6

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