The World Bank expects Romania’s economy to grow by 2.8 percent this year and 3.2 percent in 2015, according to its recently published Global Economic Prospects report.

The new forecasts for Romania are significantly better than those in the January report, which indicated a 2.5 percent growth for this year and a 2.7 percent growth for 2015.

“Developing countries in Central and Eastern Europe are expected to see recoveries in growth in 2014 as they continue to benefit from strengthening import demand from the Euro Area,” the report says. GDP growth in the sub-region is expected to reach 2.5 percent in 2014 and 2.8-2.9 percent in 2015-16, up from 2.2 percent in 2013.

Romania is one of the largest economies in the region and World Bank analysts say that its economy will start benefitting from stronger internal demand unlike other countries in the region where much of the growth is based on exports.

“In Hungary and Romania, in contrast, there are clearer signs that stronger external demand is spilling over into improvements in the labor market and recoveries in domestic demand. In general across the region, low inflation will allow central banks to maintain accommodative policies to support the recoveries in domestic demand,” the report mentions.

Romania's economy grew 3.8 percent in the first quarter, due to stronger domestic consumtion.

The World Bank lowered its global GDP growth forecasts for 2014 to 2.8 percent from 3.2 percent in January, with lower projections both for high income countries and developing economies. Developing economies in Asia and mid-Africa will still have the highest growth rates.

Find the complete report here.

Andrei Chirileasa, andrei@romania-insider.com