IMF: Romania’s economy grows by 7% this year, but its CA gap widens as well
The International Monetary Fund (IMF) revised its forecast for Romania’s economy upwards to 7% under its October 12 World Economic Outlook (WEO), up from 6% envisaged under its spring forecast round.
Nothing surprising, the figure is in line with the Government’s expectations and the latest World Bank forecast (+7.3%).
Among the European Union countries, only Ireland (13%), Estonia (8.5%) and Hungary (7.6%) will grow faster than Romania.
The country’s economy will further rise by 4.8% in 2022 to later stabilise around a growth rate of 3.5% (2026) under the Fund’s scenario.
On the downside, the IMF has revised its forecast for Romania’s current account (CA) and inflation forecast upwards. While the inflationary path is in line with a global pattern, Romania’s structural external deficit is specific to its economy and a growing concern.
The IMF expected under its spring forecast that Romania’s CA gap would subside to 4.5% of GDP (from 5.2% in 2020), but it revised its projection to 5.7% of GDP in 2021 and 5.5% of GDP in 2022.
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