A new report from Romania's Banca Comerciala Romana (BCR) predicts 1.1 percent economic growth for Romania in 2013. The Romania in 2013 report, published January 24, suggests that the country will experience gradual recovery over the year. However, the growth prediction is significantly lower than the 1.6 percent advance foreseen by the Romanian government.

Local and international factors look more promising than last year and should help the Romanian economy to advance, according to BCR chief analyst Eugen Sinca. BCR has also revised down its inflation prediction for December 2013 to 4.1 percent, giving an expected improvement in agricultural output and the strengthening of Romania's currency as influencing factors.

The BCR report picks out several other potentially positive influences on the Romanian economy in 2013. These include the extra resources provided to the economy by the government, a better agricultural harvest after last year's drought and a small recovery in external demand. On a global scale, BCR deems investor confidence to be higher, following the provision of extra liquidity by the banks and the deal in the US to avert the feared fiscal cliff.

The 1.1 percent growth figure is the same as the prediction in a recent economic outlook for Central and Eastern Europe from BCR's parent company Erste Group. Although the Erste report gave the same prediction for growth, its tone was perhaps more negative than the BCR report. Erste warned of recession in the region in early 2013, before a pick-up later in the year.

BCR is the largest lender in Romania by assets. The group's total assets have recently declined by 0.5 percent, to some EUR 16.8 billion, but still cover some 20 percent of the Romanian banking market. BCR representatives have said that they expect the bank to return to profitability in 2013.

editor@romania-insider.com