The International Monetary Fund (IMF) has improved its forecast for Romania's GDP growth from 4.4% last October to 6% under the latest World Economic Outlook (WEO) report issued on April 6.

The revised forecast is even more optimistic than the 4.3% economic advance assumed by the Romanian Government for the fiscal planning.

According to the IMF's projections, Romania's growth would be the second-fastest in the European Union after Spain's 6.4% projected advance.

The euro area economy is expected to grow by 4.4%, slower than the 5.2% advance expected in October, as expectations of a recovery in the region's main economies have moderated. The IMF revised down its growth forecasts for Germany (-0.6pp to 3.6%), Italy (-1pp, to 4.2%), Spain (-0.8pp), and France (-0.2 pp, to 5.8%).

As for the other macroeconomic indicators, the IMF expects Romania's current account (CA) deficit to slightly narrow to 5% of GDP this year (from 5.1% in 2020) and gradually narrow by 2026, but not under 4% of GDP.

On the upside, the IMF's deflationary expectations (to 2.1% in 2022 from 2.8% this year) imply assumptions for steady exchange rate dynamics over the next couple of years.

iulian@romania-insider.com

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