Romania Economic Forecast

Romania Economic Outlook

November 28, 2017

Preliminary data revealed that growth remained in full swing in the third quarter, with GDP expanding at the fastest pace since Q3 2008. Although details are not yet available, a spending spree by households thanks to a tightening labor market and government stimulus policies likely drove activity. In addition, a rebound in investment on the back of greater absorption of EU funds is expected to have added steam to growth. While loose fiscal policies have put the economy on track to grow at the fastest pace since 2008 this year, a lack of structural reforms, ballooning government spending, rising inflation and a widening trade deficit have sparked fears that the economy could overheat. These concerns, along with controversial politics, have taken a toll on the leu, which fell to record lows in November. On 23 November, the government survived a no confidence vote, as widely expected.

Romania Economic Growth

Growth is expected to wane somewhat next year as higher inflation and tighter monetary policy take a bite out of household spending. Met the why particular panelists expect growth of 4.0% for 2018, which is unchanged from last month’s forecast. They see the economy expanding 3.4% in 2019.

Romania Economy Data

20122013201420152016
Population (million)20.120.019.919.919.8
GDP per capita (EUR)6,6347,2207,5368,0598,591
GDP (EUR bn)133145150160170
Economic Growth (GDP, annual variation in %)0.63.53.13.94.8
Consumption (annual variation in %)0.82.64.25.87.5
Investment (annual variation in %)0.6-6.83.87.2-2.2
Industrial Production (annual variation in %)2.47.96.22.81.8
Retail Sales (annual variation in %)4.10.56.48.913.5
Unemployment Rate6.97.16.86.85.9
Fiscal Balance (% of GDP)-3.7-2.1-1.4-0.8-3.0
Public Debt (% of GDP)37.337.839.438.037.6
Money (annual variation in %)4.68.88.49.49.8
Inflation Rate (CPI, annual variation in %, eop)5.01.60.8-0.9-0.5
Inflation Rate (HICP, annual variation in %)3.43.21.4-0.41.1
Inflation (PPI, annual variation in %)4.8-0.1-1.4-1.70.9
Policy Interest Rate (%)5.254.002.751.751.75
Stock Market (annual variation in %)-13.812.116.46.4-14.3
Exchange Rate (vs EUR)4.434.484.484.524.54
Exchange Rate (vs EUR, aop)4.464.424.444.444.49
Current Account (% of GDP)-5.0-1.1-0.6-1.2-2.2
Current Account Balance (EUR bn)-6.4-1.5-1.0-2.0-4.0
Trade Balance (EUR billion)-9.0-6.0-7.0-8.0-9.0
Exports (EUR billion)11.044.047.049.052.0
Imports (EUR billion)49.050.053.057.061.0
Exports (annual variation in %)0.011.06.84.36.1
Imports (annual variation in %)0.02.06.07.57.0
International Reserves (EUR)31.232.532.232.234.2
External Debt (% of GDP)74.867.863.056.554.4

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Romania Facts

ValueChangeDate
Bond Yield4.540.23 %Dec 06
Exchange Rate3.92-0.34 %Dec 06
Stock Market7,670-0.59 %Dec 06

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