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August 8, 2022

EBRD significantly improves its estimates of Romania’s economic performance in 2021, forecasts a 6 pct growth

The European Bank for Reconstruction and Development (EBRD) has significantly improved its estimates of Romania’s economic performance in 2021, forecasting a 6 percent increase this year, compared to a 3 percent advance as estimated in September last year, shows a report published on Tuesday by the international financial institution.

According to the EBRD, the three countries in Southeastern Europe (Romania, Bulgaria and Greece) were seriously affected by the COVID-19 crisis in 2020, with an average contraction of 5.2 percent, the largest in all the regions where the EBRD operates. However, a recovery is currently taking place in all three countries in Southeastern Europe, especially in Romania, so that for 2021 as a whole, the EBRD expects a growth of 5.2 percent at regional level. This is the largest upward revision of the EBRD’s growth forecasts, by almost two percentage points, compared to the estimates published in September last year.

“Romania has navigated the COVID-19 crisis better than initially estimated, with a contraction in GDP of 3.9 percent in 2020. Overall, private consumption had the most significant decline in 2020, of 4.9 percent, while sustained investment and improved exports have made a positive contribution to growth. In the last two quarters, the economy has grown at a robust pace, as containment measures have had a limited impact on economic activity … The current economic boom would lead to a 6 percent increase in GDP in 2021. By 2022, the Recovery and Resilience Facility is planned to give a significant boost to investment, while private consumption and improved exports could translate into economic growth of up to 5 percent. The main downward risk to these forecasts is related to the evolution of the pandemic,” the EBRD said.

The European Bank for Reconstruction and Development (EBRD) was established in 1991 to invest in the former communist bloc states and help them make the transition to a market economy. In recent years, the EBRD has begun to shift its focus from the former Soviet bloc to North Africa and the Middle East.

In Romania, where the EBRD is a major investor, the Bank focuses on financing infrastructure, increasing productivity and consolidating the financial sector. To date, the EBRD has invested almost nine billion euros in the country’s economy, and 76 percent of these investments have gone to the private sector.

Since the beginning of this year, the EBRD has signed investment projects worth a total of 127 million euros in Romania, after last year it provided 340 million euros in financing for the Romanian economy, Agerpres informs.

The National Commission for Strategy and Prognosis estimates an increase of 5 percent for the Gross Domestic Product in 2021.

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