Romania’s gross domestic product is forecast to grow at a 3.7% pace this year after a 4.7% estimated growth rate last year, according to the World Bank January 2017 Global Economic Prospects report.
Central Europe is expected to see a steady growth this year, “despite lower trading partner growth and rising prices for commodity imports,” the report says. In neighboring Hungary infrastructure spending is expected to boost economic growth to a 2.6% rate. For Bulgaria, the growth rate is projected at 3.2%.
According to World Bank estimates, Romania had a 4.7% growth in 2016 reflecting, as was the case in Albania, Croatia and Serbia, “strong domestic demand supported by low energy prices, faster investment growth helped by the disbursement of EU structural funds, and labor market improvements,” the report highlights. The local VAT tax cut is also reflected in the growth, while strong exports of goods and services to the Euro area were “additional supportive factors” in Romania and Croatia.
The World Bank estimates growth in the Europe and Central Asia region to have accelerated to 1.2% in 2016, mainly against “an easing of the recession in Russia, which accounts for almost 40% of regional GDP, as oil prices stabilized. Excluding Russia, regional growth eased to 2.4%, reflecting a slowdown in Turkey amid political uncertainty.”
The World Bank’s estimates on Romania’s economic growth are lower than in November, when the institution expected a 5.1% growth for 2016 and 3.8% for 2017.
Official statistics show that Romania’s economy increased by 4.9% in the first nine months of 2016 compared to the same period of 2015. The growth rate was 4.4% in the third quarter, down from 6% in the second quarter.