Inflation-based growth? Romania’s economic forecast body revises up nominal GDP in 2019 on higher inflation, weaker RON

Sorin Melenciuc 07/05/2019 | 07:00

The National Commission for Strategy and Prognosis (CNSP), the government’s economic forecast body, has maintained its estimates regarding the gross domestic product (GDP) growth rate in 2019, but rose the nominal GDP value on higher inflation rate and weaker RON.

The commission estimates Romania’s GDP will grow by 5.5 percent in 2019 up to RON 1.031 billion (EUR 217.5 billion), or EUR 11,233 per inhabitant, from EUR 202.9 billion (EUR 10,417 /inhabitant) in 2018.

The previous forecast, released in January, indicated a a GDP value of to RON 1.022.5 billion (EUR 218.9 billion), or EUR 11,306 per inhabitant, in 2019.

But many analysts expect a slowdown of economic growth rate in 2019 to maximum 3 percent following the introduction of new taxes on banks, energy and telecom firms.

The government’s commission has revised upward its estimates regarding inflation, betting on an end-year rate of 3.2 percent (3.4 percent on annual average), compared with 3.3 percent (4.6 percent annual average) in 2018.

In January, the official forecast was 2.8 percent inflation rate at the end of this year (2.8 percent on annual average).

The commission has also revised upward its EUR/RON exchange rate estimate, forecasting an exchange rate annual average of 4.74 in 2019 – from 4.67 in the previous report.

The average net monthly earnings of Romanian employees will reach RON 3,085 (EUR 651) in 2019, up 14.9 percent in nominal terms (and 11.1 percent in real terms) from the previous year, according to the commission.

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