Romania Economic Forecast

Romania Economic Outlook

February 6, 2018

On 15 January Prime Minister Mihai Tudose resigned following a power struggle with the leader of the ruling Social Democratic Party, Liviu Dragnea. Viorica Dancila was swiftly appointed and on 29 January was confirmed by the parliament, becoming the third prime minister in seven months amid ongoing anti-corruption protests. The economy, however, continued to expand strongly in the final quarter of the year, according to available data. Buoyant external demand from the EU continued to underpin growth: Both exports and industrial production recorded remarkable year-on-year increases in the first two months of Q4, on the back of a strong automotive sector. Household spending also remained buoyant: Retail sales soared in annual terms in both October and November, supported by a tightening labor market and robust wage rises. That said, Romania’s political landscape continues to be troubled.

Romania Economic Growth

This year, growth in private consumption is expected to slow. Although wages will continue to rise at a healthy rate and the labor market remain tight, higher inflation, weakening consumer confidence and less favorable financing conditions will likely weigh on consumer spending. On the other hand, an increased absorption of EU funds will fuel a faster expansion in fixed investment. All in all, growth should moderate but remain solid. Downside risks to the outlook come from the weak fiscal position and the possibility of continued unrest. Met the why particular panelists expect growth of 4.4% for 2018, which is up 0.2 percentage points from last month’s forecast. They see the economy expanding 3.5% in 2019.

Romania Economy Data

Population (million)
GDP per capita (EUR)6,6347,2207,5368,0598,591
GDP (EUR bn)133145150160170
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)0.6-
Industrial Production (annual variation in %)
Retail Sales (annual variation in %)
Unemployment Rate6.
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 %)
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (HICP, annual variation in %)
Inflation (PPI, annual variation in %)4.8-0.1-1.4-1.70.9
Policy Interest Rate (%)
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)
Imports (EUR billion)
Exports (annual variation in %)
Imports (annual variation in %)
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

Bond Yield4.650.23 %Feb 20
Exchange Rate3.78-0.34 %Feb 20
Stock Market8,307-0.59 %Feb 20

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