World Bank improves Romania’s economic growth forecast to 4.4 pct

Georgeta Gheorghe 06/06/2017 | 10:48

The World Bank has improved Romania’s economic growth forecast by 4.4 pct, up by 0.7 percent compared to January’s previsions. The World Bank released its Global Economy Prospects on Monday.

The global institution also improved the growth forecast of Romania’s GDP to 3.7 percent for 2018 and to 3.5 percent in 2019.

According to the financial institution, the financial easing will contribute less to Romania’s economic growth and will put pressure on the public and external deficits.

In a May interview, Minister of Public Finance Viorel Stefan told Reuters that the country will meet this year’s budget deficit target of 3 percent of the GDP. Moreover, according to Stefan, Romania’s economic growth could reach 5.2 percent, on the back of wage increases and tax cuts.

In the first quarter of 2017, Romania had the fastest growth in the EU, at 5.7 percent due to an increase in consumption. At end of April, the budget was recording a slight excess.

Stefan explained that the budget could record an excess at the end of Q1, meaning the deficit target of 3 percent of the GDP for the whole year will certainly be met.

The pace of growth in the first semester is usually slower than in other quarters. So the figures allow us to be optimistic and that the GDP advance in 2017 will exceed 2.5 percent. Our governing program includes structural reforms, measures aimed at boosting production in several sectors, which gradually will transfer the growth engines of the economy from consumption to production,” the minister said.

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