BNR: Economic growth to accelerate higher than anticipated, more pronounced moderation in 2018

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The economic growth is expected to record a significantly higher acceleration in 2017 than previously anticipated, followed by a more pronounced moderation in 2018 and a modest slowdown in 2019, show the minutes of the monetary policy meeting of the National Bank of Romania (BNR) Board on November 7, 2017.

“In the discussions on the probable pattern of aggregate demand surplus, the Board members noted that the economic advance is expected to record a significantly higher acceleration in 2017 than previously anticipated, followed by a more pronounced moderation in 2018 and a modest slowdown in 2019, with its projected dynamics remaining above the potential GDP pace in 2018, but then going down to a slightly lower value. It was shown that the outlook is supported by the probable extension until 2018 of the expansionistic character of fiscal and income policy, but in gradual attenuation compared to 2016. It also involves a gradual decrease in the degree of relaxation of monetary conditions compared to 2017, but also the improvement in the absorption of European funds and a relatively more robust economic expansion in the Eurozone / EU and globally in the short term,” read the minutes.

As to the cyclical position of the economy, the Board members noted that, according to the revised statistical data, economic growth saw a more pronounced acceleration in the second quarter than the one initially communicated, namely 6.1pct from 5.7pct in the previous quarter, and only a marginal slowdown in quarterly terms, signaling a greater opening of the positive gap of the GDP within this interval.

According to the estimates made public on Tuesday by the National Institute of Statistics, Romania’s GDP recorded in the third quarter an 8.8pct increase in unadjusted terms, 8.6 per seasonally adjusted terms respectively, compared to the similar period of last year, and GDP rose in real terms by 2.6pct in the third quarter from the second quarter of 2017.

In the first nine months of this year, Romania’s economy advanced by 7pct in unadjusted terms and by 6.9pct in seasonally adjusted terms.