World Bank revises downward forecast for Romania’s economic recovery

Romania's economy will rise by 3.5% this year, after a 5% contraction in 2020, according to the latest issue of the World Bank's Global Economic Prospects.

The economic growth will accelerate to 4.1% in 2022. In comparison, in October last year, the World Bank estimated that the Romanian economy would contract by 5.7% in 2020 and register a recovery of 4.9% in 2021.

For the Europe and Central Asia (ECA) region, which includes Romania, the World Bank expects moderate economic growth of 3.3% this year.

Still, it underlines that this scenario is conditioned by the distribution of an effective vaccine in early 2021 in advanced economies, large emerging markets, and developing economies, including Russia, followed by other countries in the second half of the year.

The World Bank also revised down its forecasts for global economic growth in 2021 to 4% from 4.2% as previously estimated, after a contraction of 4.3% in 2020.

It warned that an increase in COVID-19 infection cases and vaccine distribution delays could limit this year's economic recovery to just 1.6%.

"The near-term outlook remains highly uncertain, and different growth outcomes are still possible, as a section of the report details. A downside scenario in which infections continue to rise and the rollout of a vaccine is delayed could limit the global expansion to 1.6% in 2021. Meanwhile, in an upside scenario with successful pandemic control and a faster vaccination process, global growth could accelerate to nearly 5%," reads the WB report.

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