Romania's National Prognosis Commission ups economic growth forecast

Romania’s National Prognosis Commission significantly revised up the local economy’s growth forecast until 2020. These indicators are the basis for building the annual state budget. The commission revised the growth forecast from 4.3% to 5.2% for this year and from 4.5% to 5.5% for 2018. The economic growth was revised from 4.7% to 5.7% for 2019 and from 4.2% to 5.7% for 2020. The GDP is estimated at RON 815.2 billion (EUR 181.4 billion) for this year, up from the previous estimate of around EUR 179.6 billion. Inflation forecast for 2017 was revised down to an annual average of 1.4% from the previous estimate of 1.9%. For the next three years, the estimate remained unchanged. Liberal MP Florin Citu, the deputy president of the Senate’s budget committee, and a former chief economist in a top local bank, said that he suspected that the National Prognosis Commission acted illegally in upgrading its forecast so that the Social Democratic Party (PSD) and its leader Liviu Dragnea could justify the budget draft for this year. “The National Prognosis Commission was obliged to revise its estimates in line with the ones presented by PSD and Liviu Dragnea and offer a legal basis to draft the budget for 2017,” Citu said. He added that PDS needed a higher GDP estimate for 2017 in order to be able to carry out its “pharaonic proposals”. PSD based its budget draft for 2017 on an estimated economic growth of 5.2% in 2017, higher than the one in 2016. Meanwhile, most international financial institutions and local banks have lower growth forecasts for 2017 than the estimated growth for 2016. editor@romania-insider.com