World Bank expects Romania's economy to grow by 2.9% this year

The Romanian economy is expected to grow by 2.9% this year, the World Bank said in the Global Economic Prospects (GEP) on June 7. It is a cautious forecast made in a very volatile context, when the energy prices and security, as well as the food security and the rampant inflation, are more acute concerns.

Compared to the January edition of the GEP report, the WB estimates are significantly lower given that, at that time, the organization anticipated an advance of 4.3%. But, at that time, there was no war in Europe.

The World Bank forecasts a 3.7% expansion of Romania's GDP for 2023, compared to a 3.8% advance forecast in January, and an increase of 3.9% for 2024.

WB's projection for this year is in line with the official expectations but diverges from more pessimistic views expressed, for instance, by the chief economist of Unicredit for Central and Eastern Europe Dan Bucsa, who sees Romania's economy inching up by 1% at most, this year. However, such pessimistic scenarios are not common while the consensus forecast is closer to 2%.

"Our forecast for Romania is the most pessimistic in the region, leaving aside Russia. In the European Union, [our forecast for Romania's growth] is one of the lowest growth rates - we expect around 1%, but I think even this will be difficult to achieve," Bucsa said, according to Hotnews.ro.

Romania's GDP increased unexpectedly by 6.5% YoY in Q1, but the analysts still look forward to seeing detailed data in order to understand the drivers of the growth.

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