Analysts estimate slower growth for Romania’s economy in 2020

Local economists expect Romania’s economic growth to slow down this year while the local currency (RON) will continue to weaken against the euro.

The economists of UniCredit Bank are the most pessimistic about the evolution of Romania’s economy this year, anticipating a growth rate of 2.6%, down from an estimated 4.2% in 2019. Banca Transilvania’s analysts expect a growth rate of 3.5% while Raiffeisen Bank’s economists expect 3% real economic growth.

The analysts interviewed by Ziarul Financiar said the local economy will continue to grow above the EU average but warned about external and internal risks that could negatively impact the evolution. External risks are related to the lower economic growth in Western Europe and mounting global political tensions while internal risks are related to the tight situation of the public finances in an election year.

“All the forecasts for Romania, including the most optimistic of 4.1% belonging to the Government, indicate a slowdown of the economic growth for this year compared to the previous years, in line with the trend of the global economy. Therefore, a stable and predictable legislative framework, as well as public investments, especially in physical infrastructure could contribute to the economic activity. Unfortunately, the low level of budget revenue as a share of GDP and the rapid pace of increase in current state spending put pressure and limit the role of fiscal-budgetary policy in stimulating economic growth,” said Ionuț Simion, Country Managing Partner PwC Romania.

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