The European Bank for Reconstruction and Development (EBRD) revised slightly downward its forecast for Romania's economy, thus maintaining one of the most pessimistic scenarios for this year's economic growth: 1.7% under the latest version of the Regional Economic Update.

This is 0.2pp less compared to the previous scenario and a significant 0.8pp less compared to the European Commission's Winter Forecast (+2.5%).

When it comes to 2024, the EBRD is slightly more optimistic (+3.3%) and broadly in line with the consensus expectations.

Local independent analysts expect economic growth rates above 2% for this year under projections that have upward risks included.

The Government has drafted the budget planning for this year based on expectations for 2.8% growth. And most importantly, the flash estimate for last year's GDP growth indicates that the economic activity remained unexpectedly robust in Q4 (+1.1% QoQ in seasonally-adjusted terms).

Analysts of two major local banks, ING Romania and BCR, recently expressed expectations for growth rates above 2% this year based on the expected effects of the European funds.

"Regarding the economic growth, we see a slowdown to 2.1% this year, from 4.8% last year. The baseline scenario is based on investments, especially public investments financed by European funds," Ciprian Dascalu, chief economist of Banca Comercială Română (BCR), said at a conference on February 16, Economica.net reported.

ING Bank chief economist Valentin Tataru was slightly more optimistic, indicating 2.5% growth for this year with potentially more robust performance being driven by the sectors of construction, service or sub-sectors, such as transport or leasing and rental activities.

iulian@romania-insider.com

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