Fitch, pessimistic about Romania’s economic growth

American ratings agency Fitch sees Romania’s economic growth at 3.8% in 2018, well below the 5.5% the Romanian Finance Ministry has forecasted. Fitch cites fiscal changes and the recent Prime Minister change in Romania as reasons to increase the macroeconomic imbalances. The agency foresees a 3.3% economic increase for 2019 in Romania. After consumption boosted Romania’s economy growth to 7% in 2017, the highest in the European Union, Fitch warns of economy overheating in the country. “With the economy operating above capacity, further fiscal easing risks increasing macroeconomic imbalances, potentially increasing inflationary pressures, weakening competitiveness and widening the current account deficit, which we project to average 3.4% of GDP in 2018-2019, from 2.3% in 2016,” writes Fitch in its recent release. The agency also thinks the fiscal deficits for 2018 and 2019 will exceed the Maastricht limit, rising to 3.4% and then 3.6% of GDP, respectively. EC expects Romania’s economic growth to slow down this year editor@romania-insider.com