ECONOMY FINANCE&BANKING

IMF revises downward to 3.1pct forecast on Romania’s economy growth rate

The International Monetary Fund (IMF) revised downward to 3.1 percent the forecast regarding the development of the Romanian economy this year and, in parallel, it estimates an increase in the inflation rate and the current account deficit, according to the latest “World Economic Outlook” report, published on Tuesday by the international financial institution.

If the IMF estimated in October that Romania would register an economic growth of 3.4 percent this year, while in the report published on Tuesday, the international financial institution revised downward the forecast regarding the growth of the Romanian economy to 3.1 percent in 2019 and to 3 percent in 2020.

“For other economies in the region with robust growth rates in recent years, such as Poland and Romania, growth is expected to moderate to about 3 percent over the medium term, reflecting the fading of stimulus from EU investment funds and accommodative policies,” the IMF report shows.

In respect to the development of Romania’s consumer prices in 2019, the IMF estimates have been revised upwards for 2019, to an average annual growth of 3.3 percent, compared with an increase of 2.7 percent foreseen in autumn, following a decline to 3 percent in 2020.

Moreover, the IMF revised upwards the estimations regarding Romania’s current account deficit in 2019 up to 5.2 percent of the GDP, taking into account that in the autumn forecast a negative balance of the current account was expected to decline to 3.4 percent of the GDP. For 2020, the IMF estimates that Romania will register a current account deficit of 4.8 percent of the GDP.

On the other hand, in terms of the development of Romania’s unemployment rate in 2019, the forecast of the international financial institution remains unchanged, to 4.8 percent, whereas in 2020, the unemployment rate will slightly increase to 4.9 percent.

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