The European Commission (EC) has revised downwards its economit growth forecast for Romania, for both 2018 and 2019, according to its Summer 2018 Interim Economic Forecast.

Thus, the EC expects Romania’s economy to grow by 4.1% in 2018, down from the 4.5% forecasted in the spring. Moreover, the Commission also revised its forecast for 2019, from 3.9% to 3.8%.

“The Romanian economic boom has started to wind down. After reaching a post-crisis peak of 6.9% in 2017, real GDP growth decelerated to 4.0% (y-o-y) in the first quarter of 2018. The main driver of the slowdown was a contraction in private consumption as inflation weighed more heavily on real disposable income. Export growth, in contrast, remained very robust in the first quarter of 2018 and outpaced the growth of imports,” reads the EC report.

The Commission expects the composition of growth to become more balanced “as private consumption growth tempers and investment strengthens on the back of a pickup in the implementation of projects financed by EU funds.”

The EC also expects the inflation to rise to 4.4% in 2018 and 3.4% in 2019.

Consumption continues to drive up Romania’s economic growth

Irina Marica, irina.marica@romania-insider.com