The European Commission has improved Romania's economic growth estimate for 2017 to 4.4%, according to the winter prognosis published yesterday.

The new forecast is 0.5 percentage points higher than the previous one released in autumn, and is by far the highest of all the EU member states. However, the estimated growth pace is well below the one foreseen by the Romanian Government in its 2017 budget projection, namely 5.2%.

The European Commission estimates that the Romanian economy’s advance will be supported by the internal consumption, which is expected to go up by 6.7% compared to 2016, and investments (up 6.2%).

The EC also improved its economic growth forecast for 2018 by 0.1 pp, to 3.7%. However, the economic growth estimate for 2016 has been reduced from 5.2% to 4.9%. This was a new post-crisis record related to the stimulus measures and the successive increases in public sector wages and the minimum wage, which boosted consumption by 9%.

The unemployment dropped significantly in 2016 and will remain stable this year, at a low level. The inflation is expected to grow to 1.6% this year, and to reach 2.9% in 2018. Private consumption will grow steadily in 2017, before becoming more moderate in 2018, once the prices increase.

Romania’s economy grows by 4.8% in 2016

editor@romania-insider.com