ING expects Romania’s economy and currency to weaken
Romania’s economy will rise by 4% this year, but may see sudden slowdown to 2.8% in 2020, said Ciprian Dascălu, chief economist of ING Bank Romania, at the Legal & Tax conference organized by Ziarul Financiar in partnership with NNDKP.
The currency will similarly remain steady this year to slightly weaken in nominal terms to RON 4.85 per EUR by the end of 2020 (from a current level or around RON 4.75 per EUR), he added.
"This year we see a 4% GDP growth, but the delayed effects of the global economic slowdown will be felt. Inflation will remain in the upper half [of the target band], at 3-3.5%. (...) The exchange may reach RON 4.85 to EUR by the end of 2020, but the risks are asymmetric. If the external environment remains friendly, [and] the interest rates are relatively low, it does not take a big effort for the central bank to maintain the stability of the exchange rate,” says Dascălu.
He pointed out that the main vulnerability of the Romanian economy, and the most difficult to tackle, is that of the twin deficits, meaning the current account deficit and the budget deficit.