The economic growth in Romania will slow down to 2.7% in 2020 as the fiscal policy is expected to tighten in line with the new Government's long-term intention to reach a 3% of GDP budget deficit, according to the Outlook 2020 report issued by financial management firm OTP Asset Management Romania.
The fiscal consolidation policies will prove critical for further developments, the report highlights.
The slowdown will occur amid sluggish global growth, yet not a recession.
Speaking of the most critical macroeconomic development, the public deficit (“a major risk factor for that will remain on the agenda in the next period”), the OTP Asset Management analysts say that the credibility and the success of the fiscal consolidation will eventually determine whether the pressure on the exchange rate and on the yield curve will maintain in the future.
The authors of the report express optimism regarding the evolution of the bonds denominated in EUR and USD [which account for a significant part of the most popular investment funds in Romania], as well as regarding the evolution of the Romanian shares [another important asset class for the investment funds].
Romania has to borrow some RON 86.9 billion (EUR 18.1 bln) this year to finance its 3.6% of GDP budget deficit and...