IMF revises forecast for Romania's economic growth to 2.2%

The International Monetary Fund (IMF) has reduced its expectation about Romania's economic growth this year from 4.8% envisaged last autumn to 2.2% under the spring issue of the World Economic Outlook. The Fund's economists argue that the countries close to Ukraine are the most economically affected by the war.

Comparatively, Bulgaria's economy is expected to grow by 3.2%, while that of Hungary and Poland by 3.7%, Stirileprotv.ro reported.

In 2023, Romania's economy is expected to accelerate to a 3.4% growth rate.

The IMF has also lowered its expectations for global economic growth over the next two years in response to Russia's invasion of Ukraine. Thus, the Fund now expects the world economy to grow by 3.6% in both 2022 and 2023, a sharp slowdown from 6.1% growth in 2021.

The new forecast reflects a downward revision by 0.8 pp and 0.2 pp, respectively, compared to the forecast issued by the Fund in January, before the war began.

Regarding inflation, the IMF has significantly revised its estimates, forecasting that Romania will see an average annual price increase of 9.3% this year, two and a half times more than the 3.4% advance forecast last autumn. The pace of price growth will slow to 4% next year.

The Fund sees Romania's current account deficit at 7% of GDP this year (5.5% envisaged last autumn) and 6.5% of GDP in 2023.

andrei@romaniainsider.com

(Photo source: Shutterstock)