Romania Economic Forecast

Romania Economic Outlook

June 4, 2019

Romania’s economy grew 5.0% year-on-year in the first quarter, overshooting analysts’ expectations and marking the strongest outturn in more than a year. Ahead of comprehensive first-quarter national accounts, retail sales through March suggest that household spending remained firmly in the driver’s seat, as do falling unemployment and rebounding inflation. Domestic demand, however, was likely hobbled by lackluster fixed investment as weak demand from the Eurozone appeared to stifle first-quarter industrial output. Meanwhile, external imbalances, exacerbated in recent months by tepid export growth and trickling FDI inflows, continue to loom. In late May, on the heels of a thumping for his Social Democrats at the European elections, ruling party leader Liviu Dragnea was sentenced to three years in prison on graft charges; economic sentiment improved on the news.

Romania Economic Growth

Growth is set to decelerate again this year as slower employment growth and labor shortages taper household spending gains in the aftermath of the two-year-old economic boom. Fixed investment, meanwhile, is expected to recover somewhat but could be hit by rising labor costs. Fiscal and current account deficits remain a concern. Met the why particular analysts see growth at 3.5% in 2019, up 0.2 percentage points from last month’s forecast, and at 3.0% in 2020.

Romania Economy Data

20132014201520162017
Population (million)20.020.019.919.819.6
GDP per capita (EUR)7,2207,5348,0758,6009,550
GDP (EUR bn)145150160170188
Economic Growth (GDP, annual variation in %)3.53.14.04.86.9
Consumption (annual variation in %)2.64.25.88.011.2
Investment (annual variation in %)-5.63.27.1-1.84.5
Industrial Production (annual variation in %)7.96.22.81.87.8
Retail Sales (annual variation in %)0.56.48.913.511.7
Unemployment Rate7.16.86.85.94.9
Fiscal Balance (% of GDP)-2.1-1.3-0.8-3.0-2.9
Public Debt (% of GDP)37.539.137.737.435.0
Money (annual variation in %)8.88.49.49.811.4
Inflation Rate (CPI, annual variation in %, eop)1.60.8-0.9-0.53.3
Inflation Rate (HICP, annual variation in %)3.21.4-0.4-1.11.1
Inflation (PPI, annual variation in %)-  -  -  -  -  
Policy Interest Rate (%)4.002.751.751.751.75
Stock Market (annual variation in %)26.19.1-1.11.29.4
Exchange Rate (vs EUR)4.484.484.524.544.66
Exchange Rate (vs EUR, aop)4.424.444.444.494.57
Current Account (% of GDP)-1.1-0.6-1.2-2.0-3.6
Current Account Balance (EUR bn)-1.5-1.0-2.0-3.6-6.3
Trade Balance (EUR billion)-6.0-6.0-8.0-9.0-12.0
Exports (EUR billion)44.047.049.052.057.0
Imports (EUR billion)50.053.057.061.069.0
Exports (annual variation in %)11.06.84.36.19.6
Imports (annual variation in %)2.06.07.57.013.1
International Reserves (EUR)32.532.232.234.233.5
External Debt (% of GDP)67.863.057.454.749.8

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Romania Facts

ValueChangeDate
Bond Yield4.740.23 %Jun 13
Exchange Rate4.18-0.34 %Jun 13
Stock Market8,477-0.59 %Jun 13

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