wiiw sticks with conservative forecast for Romania’s economy

Austrian think-tank Vienna Institute for International Economic Studies (wiiw) maintains a conservative forecast for Romania's economy in its latest regional report.

wiiw expects Romania's GDP to grow by only 3.8% this year - in line with Eastern Europe's average. The figure is well below the 6% growth projected by the International Monetary Fund (IMF).

The worsening COVID-19 situation has forced many countries in the region to renew economically damaging lockdowns, reads the latest wiiw's report released on April 15.

Last November, wiiw projected 3.7% GDP growth for Romania after an expected 5.5% contraction in 2020.

In absolute terms, therefore, the marginal upward revision (to 3.8% GDP growth this year) is more consistent as Romania's GDP contracted by only 3.9% last year. In other words, Romania's economy would nearly recover to the pre-crisis level this year.

wiiw also affirmed its forecast for 4.5% growth in Romania next year.

Romania's unemployment rate is expected to stagnate at 5.5% this year and ease in the next years. The current account (CA) deficit is also expected to ease from 5% of GDP in 2020-2021 to 3.9% of GDP in 2023.

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