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World Bank reviews estimates on Romanian economy advance between 2023 and 2025
Romanian economy recorded in 2023 an advance of 1.8%, 0.8% less than estmated previously, according to the latest report on Global Economic Prospects, released by the World Bank on Tuesday.
Estimates on the evolution of Romanian economy in 2024 and 2025, when the real GDP increase would be 3.3% and 3.8% were reviewed as going down. In comparison, in June 2023, the World Bank foresaw for Romania an increase of 3.9% in 2024 and 4.1% in 2025.
At world level, the World Bank warned on Tuesday, that in 2024 world economy would slow down for the third year in a row. The financial institution based in Washington, foresees that world GDP will record an advanceof 2.4% this year , after a 2.6% increase in 2023, 3% in 2022 and 6.2% in 2021, when there was a recovery after the pandemic. That would do the world economic growth recorded over 2020-2024 lower than the one recorded in the years before the world financial crisis 2008-2009, of the Asian financial crisis at the end of the 1990s and the slowing down in the early 2000, said Ayhan Kose, the deputy head economist on the World Bank.
If we exclude the economic contraction produced by the pandmeic in 2020, this year's increase would be the lowest after the 2009 financial crisis, the World Bank points out. The report released on Tuesday foresees that in 2025 the world economic advance will grow to 2.7%, but in that case figures were reviewed below the 3% estimate of June 2023, the main reason being the slowing down of advanced economies.
In those conditions, the World Bank obkective to eliminate extreme poverty until 2030 seems to be impossible to reach, when economic activity is at a deadlock due to geopolitical conflicts.
In the absence of major direction changes, the 2020 decade will be known in history as the decade of lost opportunities, according to Indermit Gill, the chief economist of the World Bank Group.
The World Bank mentions that accelerating annual investments of about 2,400 billion dollars needed to make the transition to clean energy and adapting to climate changes is a way of stimulating economic increase, especially in emerging and developing countries. The financial institution studied the effects of accelerating investments by at least 4% per year and discovered that stimulates per capita income increases, output in manufacture and service sectors and, at the same time, it improves the countries' fiscal position. However, such accelerations request comprehensive reforms, including structural reforms, in order to increase trade and cross border financial flows, as well as to improve fiscal policy and money policy domains.