RO state body revises 2021 GDP estimates in line with lower private demand, revenues

Romania's National Commission for Strategy and Prognosis (CNP) revised downward its estimates for last year's and this year's GDP performance to a 4.4% contraction in 2020 followed by a 4.3% recovery in 2021.

Both figures are 0.2pp lower than the latest forecast in November.

The Government will use the updated forecast in sketching the 2021 budget planning.

The net taxes collected by the Government plunged by 9.4% last year, compared to 8.3% previously estimated - partly as an effect of the facilities extended to taxpayers - but this will create a stronger low base effect for a more robust 5% advance in 2021, CNP says.

The Government's consumption rose by 3.9% last year and will keep advancing by 3% or just under 3% per year in the medium term, according to CNP.

The state forecasting body toned down its expectations for the private consumption (the main element of the GDP by utilization), which is estimated to have contracted by 4.9% last year (3.7% decline estimated in November) and will partly recover with a 3.7% advance in 2021.

The revision seems to be influenced by expectations for a slower advance in households' earnings: real net wages will advance by only 2.0% this year, compared to 4.4% under the CNP's November forecast.

The rise in employment was also revised downward to +1.3% from +1.7% in November.

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