ING Bank revises down economic growth estimate for Romania, to 4.8%

ING Bank has revised down its estimate on Romania’s economic growth for this year from 5.2% to 4.8% due to the disappointing results on the GDP evolution in the third quarter and due to tensions in the labor market. ING warned that the lack of skilled labor, which came up in the talks with its customers, can limit the economic growth and lead to price pressure. “Private investments will remain limited due to lack of manpower,” ING Bank analysts think. According to the report, recent job creation in Romania has been almost exclusively due to tertiary education employment, despite being the segment with the lowest share of the total workforce (15%) in Europe, with only a 3.3% unemployment rate. Accessibility issues, reflected by only 5-6% of the total number of university students coming from rural areas, where 44% of the country’s population lives, and poor R&D spending are major drags on development, ING analysts think. Economic polarization has increased in the recent decades, which has led to increased migration, with three million Romanian living abroad, according to the ING report. Romania’s economy grows by 4.8% in the third quarter editor@romania-insider.com