Romania’s economic growth could stand at 4.3 percent this year, thanks to consumption on the demand side and to agriculture on the supply side, and it will reach 3.7 percent next year, Dan Bucsa, Lead ECE Economist with UniCredit Bank London, stated on Friday, economic.net informs.
“We see this year’s growth in the ballpark of 4.3 percent thanks to consumption on the demand side and especially to agriculture on the supply side. There will be a fairly strong base effect if the harvest ends up being as foreshadowed. It seems at global level this will be the fourth year of very good agricultural production, which will have an impact on agricultural prices at global level. If we look at the structure of the Romanian economy, retail is growing by approximately 20 percent, on the other hand industry and constructions are both very close to 0 percent,” Dan Bucsa said at a press conference.
We remind our readers that last week the World Bank revised upward, to 4 percent, its forecast on Romania’s GDP growth in 2016.
According to Eurostat, in Q1 of 2016 Romania registered the highest economic growth among all EU member states (4.2 percent).
According to the UniCredit analyst, if agriculture’s contribution were to be excluded, this year’s economic growth would fall below 4 percent.
In what concerns industry, the least efficient branches are mining and those related to mining.
Bucsa stated that the national economy is overheating because of the rapid growth of salaries, and the only difference in contrast to 2008 is the absence of the real-estate bubble, prices being low in this sector.
Likewise, the UniCredit economist stated that Romania could be prepared for real convergence with the Euro Area and for the adoption of the single currency close to 2030, provided there will still be a Euro Area at that time.
In what concerns a possible Brexit, Romania could be among the worst affected countries, not Poland and Hungary as estimated, because there will be a reduction in the contributions to the EU budget. Since Poland and Hungary are capable of quickly absorbing European grants, there will be no grants left for Romania.
Dan Bucsa said the inflation rate could remain close to 2.5 percent in 2016 and 2017 and warned that the RON is 5-10 percent more expensive compared to regional currencies.