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Andrei Chirileasa
Editor-in-Chief

Andrei studied finance at the Bucharest Academy of Economic Studies and started his journalism career in 2004 with Ziarul Financiar, the leading financial newspaper in Romania, where he worked for ten years, the last six of which as editor of the capital markets section. He joined the Romania-Insider.com team in 2014 as editor and became Editor-in-Chief in 2016. He currently oversees the daily content published on Romania-Insider.com and likes to stay up to date with everything relevant in business, politics, and life in Romania. Andrei lives with his family in the countryside in Northern Romania, where he built their own house. In his free time, he studies horticulture and tends to his family’s garden. He enjoys foraging in the woods and long walks on the hills and valleys around his village. Email him for story ideas and interviews at andrei@romania-insider.com. 

 

WB revises upward its forecast for Romania’s recovery

The World Bank (WB) expects Romania's economy to grow by 4.3% this year - thus fully reversing the 3.9% contraction in 2020 - and by another 4.1% in 2022, according to the latest edition of its Europe and Central Asia Economic Update.

This is a major upward revision of the WB's previous forecast issued in January when last year's contraction was estimated at 5% to be only partly offset by the 3.5% recovery in 2021.

The strength of the recovery will depend on the success of the vaccine rollout, the policy response to the health crisis, and developments in the EU, according to the WB report.

Also, the impact of the stimulus pursued at the EU level will play a critical role in Romania's recovery given its limited fiscal space.

Romania's central bank will continue its quantitative easing policy, further supporting the recovery. Still, as growth recovers, inflationary and current account deficit pressures are expected to reemerge, requiring an appropriate policy response, according to the report.

"A substantial reduction of the fiscal deficit in 2021 is improbable, as the Government will have to support the economic recovery process. Over the medium term, the deficit will follow a downward trajectory but is likely to remain above 3% throughout the projection period," the World Bank said.

According to its estimations, the widening fiscal deficit would push the public debt to 62.2% of GDP in 2023, from 37.3% in 2019.

Still, Romania's public debt remains one of the lowest in the EU. In 2021, poverty is projected to remain elevated in Romania due to the triple-hit in incomes facing poorer segments of the population, in the form of the persistent pandemic, the poor agricultural year, and declining remittances.

(Photo: Antonyesse/ Dreamstime)

andrei@romania-insider.com

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Profile picture for user andreich
Andrei Chirileasa
Editor-in-Chief

Andrei studied finance at the Bucharest Academy of Economic Studies and started his journalism career in 2004 with Ziarul Financiar, the leading financial newspaper in Romania, where he worked for ten years, the last six of which as editor of the capital markets section. He joined the Romania-Insider.com team in 2014 as editor and became Editor-in-Chief in 2016. He currently oversees the daily content published on Romania-Insider.com and likes to stay up to date with everything relevant in business, politics, and life in Romania. Andrei lives with his family in the countryside in Northern Romania, where he built their own house. In his free time, he studies horticulture and tends to his family’s garden. He enjoys foraging in the woods and long walks on the hills and valleys around his village. Email him for story ideas and interviews at andrei@romania-insider.com. 

 

WB revises upward its forecast for Romania’s recovery

The World Bank (WB) expects Romania's economy to grow by 4.3% this year - thus fully reversing the 3.9% contraction in 2020 - and by another 4.1% in 2022, according to the latest edition of its Europe and Central Asia Economic Update.

This is a major upward revision of the WB's previous forecast issued in January when last year's contraction was estimated at 5% to be only partly offset by the 3.5% recovery in 2021.

The strength of the recovery will depend on the success of the vaccine rollout, the policy response to the health crisis, and developments in the EU, according to the WB report.

Also, the impact of the stimulus pursued at the EU level will play a critical role in Romania's recovery given its limited fiscal space.

Romania's central bank will continue its quantitative easing policy, further supporting the recovery. Still, as growth recovers, inflationary and current account deficit pressures are expected to reemerge, requiring an appropriate policy response, according to the report.

"A substantial reduction of the fiscal deficit in 2021 is improbable, as the Government will have to support the economic recovery process. Over the medium term, the deficit will follow a downward trajectory but is likely to remain above 3% throughout the projection period," the World Bank said.

According to its estimations, the widening fiscal deficit would push the public debt to 62.2% of GDP in 2023, from 37.3% in 2019.

Still, Romania's public debt remains one of the lowest in the EU. In 2021, poverty is projected to remain elevated in Romania due to the triple-hit in incomes facing poorer segments of the population, in the form of the persistent pandemic, the poor agricultural year, and declining remittances.

(Photo: Antonyesse/ Dreamstime)

andrei@romania-insider.com

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