Romania could post a higher economic growth in 2013 than Poland, the biggest market in the region, according to a recent IMF report. It would be the first time since 2008 that Romania’s economy has outpaced Poland’s, the only country in the region that has not entered recession during the crisis.
This would be manly due to the slowdown of the Polish economy, rather than a speed up for Romania. The Polish economy is expected to slow down because of the debt crisis in the eurozone and the control measures over expenses, needed to reduce the budget deficit below 3 percent, as the EU demands.
The IMF has kept estimations for Romania at 2.5 percent growth for 2013 and 0.9 percent for this year. These were previously announced in August, when the fund came to Romania for the sixth loan review mission. Poland is expected to post an economic growth of 2.4 percent in 2012, and 2.1 percent in 2013, according to the IMF.
In 2008, Romania had growth of 7.3 percent, and Poland, of 5.1 percent. Last year, Romania’s economy went up by 2.5 percent, and Poland’s, by 4.3 percent. This came after two years of economic drop for Romania, -6.6 percent in 2009 and -1.6 percent in 2010, while Poland managed to stay positive: 1.6 percent and 3.9 percent respectively. The good economic days in 2008 seem to be far gone, as Romania is expected to reach a 3.7 percent economic growth in 2017, when it would be close to Poland, with 3.6 percent, according to IMF’s current forecast. Then, the emerging markets with the highest economic growth rates will be Mongolia – 9.7 percent, Bhutan – 10.7 percent, and East Timor – 9 percent.
Back to the closer forecast, unemployment in Romania will continue to be lower than in Poland, with 7.2 percent this year – while in Poland it will be at 10 percent, and estimations for 7 percent unemployment for Romania in 2013 and an increase – 10.2 percent for Poland. On the inflation front however, the IMF expects the trend to be reversed between Romania and Poland in 2013, after a consumer price increase of 2.9 percent for Romania in 2012 and 3.9 percent for Poland. For 2013, consumer prices are forecast to be up 3.2 percent in Romania and 2.7 percent in Poland.
The overall numbers for Emerging Europe, which includes nine countries in the IMF chart, economic growth will average 2 percent this year and 2.6 percent in 2013, and inflation at 5.6 percent this year and 4.4 percent in 2013.
Meanwhile, Romania has a financing need of 10.9 percent of its GDP in 2012, according to IMF’s most recent Fiscal Monitor, while Poland needs 11.5 percent of its GDP to finance itself in 2012. The figures for 2013 show a financing need of 10.6 percent of GDP for Romania and 11.6 percent for Poland. Most of Romania’s financing needs are to cover maturing debt – 8.7 percent in 2012 and 8.8 percent in 2013.
The highest financing need among emerging markets in 2013 is for Pakistan – 31 percent of its GDP.
(photo source: IMF)