IMF sees 5% GDP contraction and double-digit unemployment in Romania this year

The International Monetary Fund estimates a 5% decline for Romania's economy this year, followed by a 3.9% growth in 2021, according to the report "World Economic Outlook."

As a result, Romania's GDP in 2021 will be 1.3% below the level of 2019 before the coronavirus (COVID-19) pandemic. Globally, this is better than the 5% GDP decline expected by most of the economies over the same two-year period.

Last year, Romania's GDP rose by 4.1%.

The IMF also forecasts that the inflation rate will drop in Romania to 2.2% in 2020, from 3.8% last year, to reach 1.5% in 2021. Unemployment, however, will explode this year, to 10.1%, compared to a rate of 3.9% in 2019. The IMF estimates that this indicator will drop to 6% next year as the economy resumes operating.

The economic crisis generated by the COVID-19 pandemic will also influence the current account deficit, which is estimated at 5.5% of GDP in 2020, up from 4.7% in 2019. According to the IMF report, the gap would return to 4.7 % of GDP next year.

"It is very likely that this year the global economy will experience the worst recession since the Great Depression, exceeding the global financial crisis a decade ago," the IMF said in its report. "The Great Lockdown, as it might be called, will dramatically reduce global growth."

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