Erste revises upward forecast for Romania's economic growth this year to 6%

Erste Group, the majority shareholder of BCR, has revised its estimates for Romania's economic growth upwards, from 5.1% to 6% in 2022, after the statistics office confirmed the robust (+5.7% YoY) growth for H1.

But the Austrian financial group reduced expectations for the country's further advance in 2023, from 4% to 2.7%, according to an analysis signed by BCR chief economist Ciprian Dascălu, Ziarul Financiar reported.

Namely, BCR estimates a decrease in economic growth in Q3, followed by stagnation in Q4 2022.

"Given the weak structure of GDP growth in H1 and the expected moderation of the external demand in H2, we cannot eliminate the possibility of a technical recession, even if this is no longer our base scenario at the moment," the report reads.

The upward risks to the forecasts come from the Government injecting funds equivalent to 3.9% of GDP into the economy in the last five months of the year - under the assumption that the executive can still finance the planned budget deficit of 5.8% of GDP.

Romania's public deficit stood at only 1.9% of GDP in January-July.

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