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CNSP: Annual average rhythm of economic growth of 4.7% for the interval 2021 – 2024; constructions, the most dynamic sector
The annual average rhythm of economic growth estimated for the period 2021 – 2024 is 4.7% with a peak in 2023 of 5% and on the part of offer the most dynamic sector will be that of constructions, according to ‘ The prognosis as regards territory, winter variant’ published by the National Commission for Strategy and Prognosis (CNSP).
For the tertiary sector it is estimated an annual average advance of 4.2%, the accent being on the development of modern services ( IT, services for enteprise,etc.)
For the industrial sector, the annual average rhythm of growth is estimated at 4.8% by the development of the branches with increased gross added value. CNSP says that the present scenario relies on prudent absorption of the EU funds on the two axes, the financial framework which refers to the programming period 2014-2020 and the Fund for Recovery and Resilience in accordance with the trend of the previous years.
As for regions, the best economic evolutions would be in South-East, South-Muntenia and South-West Oltenia for which an advance of GDP of over 5% is estimated.
For the region South-East the real growth of GDP relies, mainly, on industry and constructions. The rate of unemployment at the end of the year will get at 3.9% in 2023 against 4.2% in 2019.
The Prognosis Commission identifies risks which could affect the estimates, among which the extension of the pandemics of Covid-19 over the period anticipated initially and the slowing down of recovery of the world demand.
As for favourable perspective, there is an agricultural production in the vegetal sector significantly higher than that taken into consideration at national level in case climatic conditions are favourable and unexpected growth of the production capacities of covid-19 vaccine and the speeding up of the vaccination rhythm.
For the region South Muntenia, the positive evolution relies on all activity sectors, especially on constructions and services.
As for risks there are mentioned a drop in demand for the machine building industry ( parts for automobiles) as well as the fact that the agricultural production depends on the climate conditions, due to the lack of a performing irrigation system. The region has a share of almost 19% in the agricultural production of the country.
A favourable perspective is the relauch of the economic activity especially at the EU level, Romania being dependent on the intra-community commercial exchanges, especially through the auto industry.
For the South-West Oltenia region, the projected growth for the prognosis horizon is based on industry and constructions. According to CNSP the covid-19 pandemics was a challenge for the food industry as well,one of the biggest and most stable employers and one of the most important contributors to the GDP of the region, adaptation to the new conditions being made on the move. Even so, in the domain of services, after the aviation industry –the most affected – the HoReCa sector had most to suffer in the period of the pandemics.
The rate of unemployment at the end of the year was estimated at 4.9% in 2024 against 5.2% in 2019.
At the level of the region, the risks associated to the prognosis are reduced ( the challenges at the address of the energy sector from the European policies for environment and climatic changes), while competitive advantages are possible in the auto industry.
For the North-East region there is estimated a real growth of GDP around the value of 5% (2021-2024) based on industry, constructions and services. The rate of unemployment at the end of the year will get at 4% in 2024 against 4.3% in 2019.
Although North-East is the region with the largest number of inhabitants in Romania, the high level of emigration, due to the continuous drop in the residential population, could affect the demand for work, CNSP says.
Similarly,the high share of the civil population occupied in agriculture and low in industry expresses some of the historic imbalances which contributed to the creation of gaps as compared to other regions.
‘The reduced degree of modernisation of the county and communal roads and the high share of the non-electrified railways determine low speed for goods and passengers transport and creates supplementary obstacles as regards possible investors’ the document says.
There are favourable perspectives as well. Thus the intra-regional disparities regarding the occupied population in services (Bacau, Iasi) and agriculture (Botosani, Vaslui) show a potential which was not put to value and insufficiently used by retraining in the counties which are less developed in the region.
On the other hand, due to the low cost of workforce ( growing trend), the North-East region has a competitive advantage over the other regions in Europe for drawing investments, which is not fully used to the state of the infrastructure ( situation which we hope to improve due to the new governmental programmes for investments in infrastructure).
For the region West, there is a real growth of GDP of over 4% for the whole horizon of prognosis, based on industry and constructions.
The rate of unemployment at the end of the year is estimated at 2.2% for 2021, dropping to 1.3 percentage points until 2024, the Timis county keeping at the lowest rate of unemployment at regional level (0.8%), as it is known from the previous years, for the crisis in workforce on the market.
‘Although with strong economy, the West region faces at present a high rate of infection in the population, which means a slowing down of the regional economic recovery. In this context, the restrictions imposed will be felt in the regional economy, especially in the HoReCa domain and agro-tourism’ the CNSP document says.
In the Centre region, the real growth estimated for the GDP is about 4.9% during the whole period under scrutiny. This trend is supported mainly by the sector of industry and that of services ( branches which have the most important shares in the region economy) followed by constructions.
The main risks are the extension of the covid-19 pandemics, which could affect especially the counties with a significant share of industry as well as with a higher touristic potential.
The favourable perspective is a very good agricultural year, determined by favourable climatic conditions, which could lead to obtaining unexpectedly high vegetal and animal production and the acceleration of the vaccination against covid-19 process which could determine the quicker recovery of tourism.
If in 2019 the unemployment rate was 2.6%,it is estimated for 2021 that the rate of unemployment will be 3.4%, in 2024 being 2%.
The unemployment rate at the end of 2024 will be 1.6% against 2% in 2019.
At the level of the region, the risks associated to the prognosis are relatively reduced taking into consideration the geographic advantage and consistent investments of the last years in infrastructure as well as in the production system.
At the same time, competitive advantages can be identified in the domain of services for enterprises (outsourcing of the companies in Western Europe) as well as due to the flexibility of the production lines.