Erste revises upward forecast for Romania's 2021 GDP growth to 6.7%

Austrian financial group Erste revised upwards from 4.2% to 6.7% the estimate for Romania's economic growth this year, responding to the unexpectedly strong Q1 figures.

"Household demand and EU-funded state investment are expected to be the main drivers of growth in the coming quarters," according to Erste analysts, Profit.ro reported.

Romania's economy advanced, in real terms, by 2.8% in the first quarter compared to the previous three months, far exceeding the forecasts of analysts Erste and Bloomberg, who estimated a quarterly growth of 0.7% and 0.1%, respectively. Compared to the first quarter of 2020, Romania's Q1 GDP decreased by 0.2%.

"We are revising our growth forecast for 2021 to 6.7% (...), after big positive surprises in Q4 2020 and Q1 2021. The progress of vaccinations and the lifting of restrictions should play a key role in the economic recovery," Erste analysts said in a note.

At the end of April, the National Strategy and Forecast Commission revised upwards, from 4.3% to 5%, the estimate on GDP growth in 2021.

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