Romania will record an economic growth of 3.4% this year, followed by an advance of 3.9% in 2016, according to the autumn edition of the World Economic Outlook (WEO) report published by the International Monetary Fund (IMF).

The economic growth forecast for Romania is significantly higher compared to the WEO spring report published in April, in which IMF estimated that Romania’s GDP would grow by 2.7% this year and by 2.9% in 2016.

On the other hand, the IMF reduced its estimates for world economic growth in 2015 from 3.5% in April to 3.1% in October. The growth forecast for 2016 is also lower than in April, at 3.6% (down from 3.8%).

The Emerging and Developing Europe economies, which include Romania, are expected to grow by 3% in 2015 (up from 2.9% in the April report) and keep the same pace in 2016 (down from 3.2% in April)

Romania posted a 3.8% economic growth in the first half of 2015 compared to the same period of 2014, according to the latest data published by the National Statistics Institute (INS) on October 7. The growth rate was even in the first and second quarter, at 3.8%, in seasonally adjusted terms. In gross terms, the GDP increased by 4.3% in the first quarter and by 3.4% in the second quarter.

Commerce and IT&C were the main growth engines in the first half of this year. Industry, construction, and real estate also contributed to economic growth.

The GDP increase could slow down in the third quarter, due to negative contribution from agriculture, a sector that was severely hit by drought this year.

The International Monetary Fund estimates an inflation of -0.4% this year, which will remain negative in 2016, amounting to -0.2%. According to the April prognosis, prices were expected to grow by 1% in 2015 and by 2.4% in 2016. Meanwhile, Romania reduced the VAT rate on food from 24% to 9%, which led to negative inflation rates in June-August.

Romania will record a current account deficit of 0.7% this year, according to IMF. This will grow to 1.5% in 2016.

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editor@romania-insider.com