Analysts expect significant slowdown in Romania’s growth

Local and foreign analysts expect Romania’s economic growth rate to slow down significantly this year compared to last year’s record level. UniCredit anticipates a growth rate of 4.6% this year and 3.5% in 2019, down from an estimated 6.6% in 2017, according to a quarterly report issued by the bank. “This slowdown is the direct result of the fact that economic growth is too much based on consumption and stockpiling, while investments are affected by fiscal uncertainty and populist measures. The growth rate may slow down even more if tax increases or public tax cuts are needed to keep the budget deficit under 3% of the GDP,” according to the document. OTP Asset Management, a division of OTP Bank Romania, also expects the economic growth rate to slow down to 4% this year and 3.2% in 2019. “Household consumption will likely remain high due to the strict conditions on the labor market, but the progresses may be slower as the increase in nominal wages will lose speed after the extraordinary increases in 2017,” the OTP report says. British economic research firm Capital Economics is even more pessimistic. Its analysts expect Romania’s economic growth to slow down to 3.5% this year and 2% in 2019. “Romania’s economy recorded the fastest growth in the Central and Eastern European region, but it will probably slow down more than the consensus for 2018 shows,” the Capital Economics report says. Romania’s central bank presents main threats to economic growth Economic growth hasn’t made Romanians richer editor@romania-insider.com