Romania’s Economic Outlook Is Bright

EBRD EE outlook on Romania

Read the latest Outlook on Romania 2017 special report


In 2016, Romania’s economy achieved a GDP growth of 4.8 per cent, which was the fastest pace since 2007, and the highest mark in the EU.

“The economy accelerated at the close of 2016, propelled by strong domestic demand. In the fourth quarter, the economy expanded by 4.7 per cent over the same period in 2016, according to a preliminary estimate released on 14 February. The figure marked an acceleration of Q3’s 4.3 per cent expansion and met market expectations. On a quarter-on-quarter basis, GDP growth, adjusted for seasonal effects, accelerated to 1.3 per cent in Q4, up from Q3’s reading of 0.5 per cent,” says Christopher Mc Innis, an economist with Barcelona-based consultancy, FocusEconomics.

In 2017, GDP is expected to grow solidly, albeit at a softer pace. In March, FocusEconomics’ panellists predicted an expansion of 3.8 per cent in 2017, which is up 0.1 percentage point from February’s forecast, with growth of 3.3 per cent pencilled in for 2018.

“Private consumption will continue to be the main driver of growth but is expected to be weighed down by higher inflation. Rising regional tensions and an incendiary domestic political climate pose the main downside risks to growth,” says Mr Mc Innis.

In January, 2017, inflation rose to 0.1 per cent, which marked the first positive reading in 20 months. Nonetheless, inflation remains well below the Central Bank’s target band of 1.5-3.5 per cent. In 2017, panellists expect inflation to average 1.6 per cent, while for 2018 panellists foresee inflation of 2.8 per cent. The Central Bank kept its policy rate unchanged at its 7 February meeting. FocusEconomics Consensus Forecast panellists expect the policy rate to end 2017 at 2.12 per cent. For 2018, the panel foresees the rate closing the year at 2.79 per cent.

“The government is counting on the growth momentum carrying over in order to justify its 2017 budget, which was passed in February, and foresees large spending increases on defence, for example. The budget deficit is expected to come in at 2.99 per cent of GDP this year, within the EU’s three per cent limit, but this is based on very optimistic GDP growth forecasts. The projections are so at odds with the consensus view, of a slowdown, that the president voiced serious reservations regarding the budget’s credibility, despite signing the bill into law. The government is still reeling from its failed attempt to introduce legislation to soften anti-corruption standards, which caused mass protests across the country and cabinet ministers to resign, though the government survived a parliamentary vote of no confidence,” says Mr Mc Innis

Industrial output rose 3.6 per cent in December 2016, from the same month of the previous year, and down from November’s 5.4 per cent increase. According to the National Institute of Statistics, production in the manufacturing, electricity, gas, steam and air conditioning supply sectors accelerated, while the contraction in the mining and quarrying sector deepened, compared to November. FocusEconomics Consensus Forecast panellists expect industrial production to expand by 3.4 per cent in 2017, which is unchanged from last month’s estimate. The panel estimates that industrial output will increase by 3.8 per cent in 2018.

After the depreciation of 2016, the Romanian Lei continues to appreciate. FocusEconomics expects the currency to end 2017 at 4.25 per USD and to reach 4.05 at the end of 2018. As far as the Euro is concerned, it is expected to cost 4.46 lei at the end of 2017 and 4.46 at the end of 2018.


Risky (but Rewarding) Business

risky business

People Power Reminds the Government of the Rule of Law

It’s Time for Romania to Roar

outsourcing romania emerging europe global sourcing association

Romania’s EU Membership Was Slow to Be Appreciated But Now the Tide Is Turning

Romanian Palace Of Parliament

Changing Perspectives and Showing That True Romania is a Vibrant Innovative Country

The Competitive Edge in Central and Eastern Europe

SOFIA BULGARIA - MAY 5: View of the Ivan Vazov National Theatre in Sofia on May 5 2016. Sofia is the largest city and capital of Bulgaria.

Romanian Market Moving Towards Rebalancing

The Goal for Romania — the Positives Outweigh the Negatives

ebrd emerging europe romania

Privatisation, Past and Present in Romania

energy privatisation romania emerging europe

A Family Between Britain and Romania

london emerging europe

Merging and Growing Romania’s Outstanding Broadband and Other Infrastructures

electrogrup emerging europe

Seven Reasons for Optimism in Romania

gazelle emerging europe romania

Building on CEE’s Established Reputation for Quality and Value

Poland and Romania: Almost 100 Years of Friendship That Is Still Growing

warsaw poland emerging europe

Romania’s Short-Term Prospects Remain Solid

romania economist

Romania — Decades After Two Milestones

View of Palace of Parliament in Bucharest Romania

Romanian Wine Is Making a Comeback

Romania Could Catch Up in Innovation

innovation emerging europe

Romania’s 140 Years of UK Cooperation

Netherlands and Romania’s Love-Match Continues

romania netherlands emerging europe

Political In-fighting Must Be Resolved

Sorin Grindeanu

A Country of Beauty and Warmth That Will Reward Those Who Visit With an Open Mind

Cityscape Brasov

Romania’s Infrastructure Development Is Slow

roads romania

Romanian Wine: A Growing Opportunity

halewood wine

What Was First on the Romanian Table?

food romania dragut emerging europe

Romania Will Be a Hot Topic in Europe

Juncker’s “More, Together” Offers Romania a Better Future

aspen institute romania emerging europe

Romania To Stay Close After Brexit

Greg Hands

Surprising Resilience of Romanian Social-Democrats

BUCHAREST ROMANIA - June 21 2017: Liviu Dragnea President of Social Democrat Party speaks in front of Parliament during a no-confidence vote against Sorin Grindeanu's Cabinet.

Office Real-Estate Is Burgeoning in Romania

romania office space emerging europe

Alexandru Petrescu: Romania Is Working to Solidify the Highest Growth Rate in Europe

BUCHAREST ROMANIA - MAY 1: Unidentified people relax and socialize in the green area of the Promenada Mall on May 1 2014 in Bucharest Romania. The mall has a gross floor area of approx. 110000 m.

Romgaz and GE Partner in a New Power Project

romania GE

The Bucharest Stock Exchange Has Started the Year on a Promising Note

stock exchange bucharest

Romania Can Foster German Partnership

frankfurt emerging europe

Romanian Banks Must Use Lessons Learned

romania emerging europe banks

Romania’s Government Plans to Grow the Country’s Already High ICT Reputation

romania ICT emerging europe

Can Romania’s success last longer?

brasov adecco emerging europe

Romania in 2017 in Brief

romania emerging europe

Princess Marina Sturdza: Things Are Bound to Improve for Romania

Central square in Iasi town Moldavia Romania

Romania’s European Values Are Changing Public Misinformed Opinions

world bank emerging europe

Nurturing a Needed Knowledge and Innovation Culture

It cluster cluj

Romania Needs to Follow its EU Membership With Some Sweeping Reforms to Avoid Stagnation

Bucharest Romania - March 07 2016: Bucharest Sky Tower Business Center. Bucharest urban landscape.

20 Years of Romanian-US Cooperation

usa romania emerging europe

Romanian IT Business Statistics Are Promising

ANIS romanian ICT

Driving the Romanian Automotive Industry

opel romania

Romanian Upgrade to Emerging Market is on the Cards

Romania capital market

Romania Says No to Corruption

Corruption romania

Romania Works to Cement its Position in the EU

european union

Robust First-Quarter Growth in Romania

emerging europe romania brasov

Leave a Reply

Your email address will not be published. Required fields are marked *