Garanti Bank revises upwards Romania’s economic growth estimate to 4 pct in 2017

Garanti Bank has increased its forecast regarding GDP growth in 2017, to 4 percent, from 3.7 percent estimated last year, due to improved expectations for trade and industry.

“2017 is about maintaining macroeconomic stability and most importantly, about encouraging investments, in order to improve the sustainability of the economic advance and drive productivity growth. Romania has solid macroeconomic fundaments and stable investment grade ratings, and we expect this year’s economic advance to be stronger than in 2016”, stated Ufuk Tandoğan, CEO of Garanti Bank Romania.

The bank’s experts stated that Romania’s budget deficit could get over the 3 percent target this year, due to the fiscal relaxation measures and the hike of wages in the public sector,

On banking legislation, Garanti says that the uncertainty has been reduced after the The Constitutional Court decided that the law of debt discharge was partially non-constitutional and the Swiss francs conversion law was unconstitutional.

Garanti Bank expects the inflation rate to reach 2 percent this year as administrative prices should increase by year end. As a result, the National Bank of Romania will most likely not increase the key interest rate in 2017, according to Garanti’s quarterly macroeconomic report. At the same time, the FX mandatory reserves ratio could be lowered.