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European Commission reviews estimates referring to Romanian economic advance
On Thursday, the European Commission estimated that the growth rate of Romanian economy slowed down by 1.8% in 2023, 0.4% less than estimated in the fall, when the high inflation and slow credit growth affected domestic demand, while foreign demand was very low, according to winter economic provisions released on Thursday by EC.
The Commission also reviewed estimates referring to the advance of Romanian economy in 2024 to 2.9% from 3.1% as foreseen in the fall of 2023.
Although private consumption is expected to increase, investments will remain the main contributor to GDP increase this year. Monetary policy is expected to be a restrictive one in 2024 and will relax only gradually when inflation pressure drops.
The relaxation of financial and monetary conditions, accompanied by a higher foreign demand will lead to a real GDP increase of 3.2% in 2025, somewhat less than autumn prognosis, the EC report shows.
Concerning inflation, EC estimates that in 2023 it dropped to 9.7% from 12% in 2022, mainly due to the significant slowdown of private credit increase and strict monetary conditions, as well as lower energy and food prices.
Except for a short period at the beginning of 2024, following some increase of indirect taxes, prices will continue to drop. Average annual inflation is foreseen to reach 5.8% in 2024 in order to slow down to 3.6% in 2025,”EC estimates, warning that there are risks of a disinflation process more gradual in case salaries and pensions continue to grow rapidly.
The European Commission publishes two sets of detailed provisions every year, in the spring and autumn and two sets of intermediate provisions in winter and summer. Intermediate provisions include annual and quarterly GDP and inflation values of all member states for the on-going and future years, as well as data for the EU and euro areas.