The International Monetary Fund (IMF) expects Romania’s GDP to grow by 7% this year, led by private consumption and accompanied by a transitory increase in inflation.

For next year, the projected growth is 4.8%. The IMF says the Romanian economy fared relatively well during the COVID-19 crisis, as the GDP contraction in 2020 (-3.9%) was significantly milder than the EU average (-6.2%).

“Effective and timely fiscal, monetary and financial policy easing helped to curb the economic downturn and the rise in unemployment,” the IMF wrote in a press release that marks the conclusion of 2021 Article IV Consultation with Romania.

IMF’s experts expect Romania’s output to recover to its pre-pandemic trajectory over the medium term, as protracted scarring from the pandemic is expected to be contained.

“Public investment will be boosted by a pickup of EU-funded projects, including through new resources under the NGEU funds and the EU 2021-27 multiannual budget. The current account deficit is projected to narrow moderately into the medium term as fiscal consolidation proceeds and growth decelerates toward potential,” reads the IMF’s assessment.

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andrei@romania-insider.com