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October 7, 2022

Prognosis Commission revises GDP growth projection down to 5.5 pct, raises inflation forecast figures

The National Prognosis Commission (CNP) revised downwards to 5.5 pct its projection for GDP growth this year, from 6.1 pct in April.

The economic forecast institution also revised upwards it year-end inflation estimate from 3.2 pct to 3.5 pct.

According to the 2018 – 2022 Outlook of the Major Macroeconomic Indicators, GDP growth figures for the next three years remained unchanged at 5.7 pct in 2019 and 2020, and 5 pct in 2021. Year-end inflation figures for the interval 2019 – 2020 didn’t change either, as CNP expects the consumer price index to be 2.8 pct in 2019; 2.5 pct in 2020 and 2.3 pct at the end of 2021.

Final consumption will slow down this year to 5.4 pct as to 8.4 pct in 2017; the figure is also revised from CNP’s April projection of 6.3 pct. Household individual consumption will advance by 5.5 pct in 2018; 5.8 pct in 2019; 5.6 pct in 2020; and 5.2 pct in 2021.

Export and import related figures also remained unchanged: FOB export is expected to grow 8.7 pct this year compared to 9.1 pct the year before, and imports will go up 9.4 pct as to 12.2 pct in 2017.

Forecasts regarding the current account deficit are also nailed down at 3.1 pct of GDP this year; 2.8 pct of GDP in 2019; 2.6 pct of GDP in 2020; and 2.3 pct in 2021.

The exchange rate estimate is 4.65 lei/euro this year; 4.62 lei/euro in 2019; 4.60 lei/euro in 2020; 4.58 lei/euro in 2021.

The European Commission’s summer interim economic forecast released on July 12 maintains the estimate for Romania’s GDP growth at 4.5 pct this year and expects it to stand at 3.9 pct in 2019.

According to the EC, the inflation rate will advance to 4.2 pct this year, slowing down to 3.4 pct in 2019, while the unemployment rate will be 4.5 pct in 2018 and 4.4 pct in 2019.

The current account deficit is seen at 3.6 pct of GDP in 2018 and 3.9 pct in 2019, while the government debt will climb to 35.3 pct of GDP this year and will reach 36.4 pct of GDP in 2019.

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